The Dallas-based bank’s index in July was 95.1, about 10 points higher than the month before, when Michigan’s economy hit rock bottom, the figures showed.
Eight of the nine sub-indices were positive in July, the best performance since February – just before the start of the COVID-19 pandemic – when all nine were positive.
The positive indices in July were:
- non-farm wages
- unemployment insurance claims
- industrial electricity demand
- light vehicle manufacturing
- total state trading
- hotel occupancy
- state tax revenue
Only the Michigan home price sub-index was negative in July.
After hitting lows in mid-June, COVID-19 infections in Michigan have increased steadily since then. This is likely to contribute to economic risk in the future, according to the Comerica report.
“This represents a significant downside risk factor for the state’s economy this fall and winter,” wrote economists at Comerica. “The increase in cases in other states is also a risk factor for Michigan as they weigh on auto sales.”
Economists pointed to stable light vehicle sales in July and August, close to a unit rate of 15.0 million, well below the record sales rate of 18.7 million units in August 2019. And l California’s recently announced ban on the sale of new gasoline-powered cars by 2035 will result in a significant reduction in the manpower needed per vehicle assembly, they wrote.
Despite some positive numbers in the Comerica report, Michigan employment levels remain at negative levels.
Last week, 18,040 people in the state filed new jobless claims, up slightly from the revised 17,402 the week before, Crain’s reported earlier Thursday. New claims remain nearly three times higher than the 7,406 original claims filed in the same week last year, according to data from the US Federal Reserve.
Michigan’s unemployment rate was 8.7% in August, signaling the long-term fragility of the state’s economy.