Leading Indicators Up In December

February 18, 1998--The University of San Diego's Index of Leading Economic Indicators for San Diego County rose 0.6 percent in December.   Solid gains in initial claims for unemployment insurance, local stock prices, and tourism led the upward move.  There were smaller advances in building permits and help wanted advertising.  The outlook for the national economy was unchanged during the month.
  Index of Leading Economic Indicators 

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

Source: University of San Diego 

 

 + 0.6 % 
  Building Permits 

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

Source: Construction Industry Research Board 

 

 +0.10% 
  Unemployment Insurance 

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

Source: Employment Development Department 

 

 +1.07% 
  Stock Prices 

San Diego Stock Exchange Index (December) 

Source: San Diego Daily Transcript 

 

 +0.99% 
  Tourism 

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

Source: San Diego Convention & Visitors Bureau 

 

 +0.85% 
  Help Wanted Advertising 

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

Source: Greater San Diego Chamber of Commerce 

 

 + 0.50% 
  National Economy 

Index of Leading Economic Indicators (December) 

Source: The Conference Board 

 

 + 0.00% 

With December's gain, the Index has now advanced for 33 months in a row.  Since economists typically look for three consecutive changes in a leading index in one direction as an indication of the direction of an economy, the outlook remains bright for the local economy.  Although the increase was not as great as in the last two months, it was still a significant advance.  With no component decreasing during December, it is unlikely that the outlook will change significantly in the near future.

A review of the data for San Diego County last year shows that 1997 was a good year for the local economy.  Residential units authorized by building permits totaled 11,402 in 1997, an increase of 66% over the 6,868 authorized in 1996.  The San Diego Convention and Visitors Bureau's Visitor Index averaged 141.0 for the year, which was 7.5% higher than 1996's average of 131.2.  On the employment front, unemployment was 3.1% in December 1997, compared with 4.1% in December 1996.  Average monthly non-farm employment in the county was 1,022,000 during 1997, an increase of 23,000 (2.3%) over 1996's average of 999,000.  Again, very good numbers were posted for 1997, and more positive results are expected for 1998.

December's increase puts the Index of Leading Economic Indicators for San Diego County at 141.4,  up from October's reading of 140.6.  There were revisions in building permits and in the national Index of Leading Economic Indicators for several months of 1987.  The only impact was that September's value for the Index was revised upward to 137.4 from 137.3.  The attached table gives the revised figures for all the indicator components for all months of 1997.  The fluctuations of the Index of Leading Economic Indicators for San Diego County for the last year are given below:
 
Index 
Change
1996  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  136.4 
+0.5% 
SEP  137.4 
+0.7% 
OCT  139.0 
+1.2% 
NOV   140.6 
+0.7% 
DEC  141.4 
+0.8% 
 

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