Comerica Bank’s California Economic Activity Index improved by 0.1 percentage points in December to a level of 126.5. December’s reading is 42 points, or 51 percent, above the index cyclical low of 84.1. The index averaged 122.4 points for all of 2016, two and three-fifths points above the average for all of 2015. November’s index reading was 126.4.
“Our California Economic Activity Index increased in December for the ninth consecutive month. We said 10 months last time, but a data revision this month has changed the story. Most index components were positive for December, including nonfarm employment, state exports, housing starts, home prices and the technology stock price index. However, unemployment claims (inverted), defense spending and hotel occupancy dipped. State exports have generally been increasing but the strong dollar is a headwind for California’s international exports, while the weak Mexican peso is a specific headwind,” said Robert Dye, Chief Economist at Comerica Bank. “President Trump has announced his intention to significantly increase U.S. defense spending, which is a positive for the state economy.”
For a PDF version of the California Economic Activity Index click here: California_Index_0217.