School of Business Administration

Leading Indicators Up In August

October 21, 1997--The University of San Diego's Index of Leading Economic Indicators for San Diego County rose 0.5 percent in August.   As was the case in July, strong gains in building permits and local stock prices led the way to the upside.  Also positive, although only slightly so, were tourism and the outlook for the national economy.  Initial claims for unemployment insurance and help wanted advertising were virtually unchanged, although there was a slight negative bias to the former.

 

Index of Leading Economic Indicators

The index for San Diego County that includes the components listed below (July)

Source: University of San Diego 

 

+ 0.5 % 

 

Building Permits

Residential units authorized by building permits in San Diego County (July)

Source: Construction Industry Research Board

 

+1.18% 

 

Unemployment Insurance

Initial claims for unemployment insurance in San Diego County, inverted (July)

Source: Employment Development Department

 

- 0.03% 

 

Stock Prices

San Diego Stock Exchange Index (July)

Source: San Diego Daily Transcript

 

+ 1.49% 

 

Tourism

An index of tourist activity in San Diego County (July)

Source: San Diego Convention & Visitors Bureau

 

+0.19% 

 

Help Wanted Advertising

An index of help wanted advertising in theSan Diego Union-Tribune (July)

Source: Greater San Diego Chamber of Commerce

 

+ 0.00% 

 

National Economy

Index of Leading Economic Indicators (July)

Source: The Conference Board

 

+ 0.30% 

August's rise was the 29th consecutive monthly increase in the Index. The move was similar to July's, with sharp gains in building permits and local stock prices, some support from tourism and the national economy, and a flat labor market. Thus, the outlook for the San Diego economy is the same: solid economic growth is likely now through at least the first half of 1998, with steady gains in employment.

Some may wonder why steady employment growth is forecast when both initial claims for unemployment insurance and help wanted advertising were unchanged during the month. The reason is that the changes reported in each component are in comparison with the level of a component in the previous month. Initial claims for unemployment insurance for August remain unchanged from July's already low level. And help wanted advertising for August remains unchanged from July's already high level.

With many of the components already at high absolute levels, it may be difficult for them to obtain positive comparisons. This may be the situation with tourism. That component has not fallen since October 1995; it has seen tremendous gains in the intervening period; and the current year has been exceptional. While August's gain in tourism appears weak, it is in fact a small gain from a very high level.

August's increase puts the Index of Leading Economic Indicators for San Diego County at 136.5, up from July's reading of 135.7. Revisions in various components caused June's Index level to be changed to 135.1 instead of the previously reported 135.0. This in turn caused July's change in the Index to be +0.4% instead of the previously reported change of +0.5% for the month. The fluctuations of the Index of Leading Economic Indicators for San Diego County for the last year are given below:

Index 

Change

1996 

AUG 

129.0 

+0.2% 

 

SEP 

129.2 

+0.2% 

OCT 

129.5 

+0.2% 

NOV 

130.1 

+0.5% 

DEC 

130.7 

+0.4% 

1997 

JAN 

131.5 

+0.6% 

FEB 

132.6 

+0.9% 

MAR 

133.7 

+0.8% 

APR 

134.2 

+0.3% 

MAY 

134.5 

+0.3% 

JUN 

135.1 

+0.4% 

JUL 

135.7 

+0.4% 

AUG

135.5

+0.5% 
 

For more information on the University of San Diego's Index of Leading Economic Indicators or the activities of the University's Economic Research Group, please contact:

 

Professor Alan Gin
School of Business Administration
University of San Diego
5998 Alcalá Park
San Diego, CA 92110 

TEL: (619) 260-4883

FAX: (619) 260-4891

E-mail: AGin@prodigy.net