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December 19, 1997--The University of San Diego's Index of Leading Economic Indicators for San Diego County rose 1.2 percent in October. All six components of the Index rose during the month. For the third straight month, there were sharp increases in building permits and local stock prices. Smaller gains were registered by tourism, help wanted advertising, and the outlook for the national economy. Initial claims for unemployment insurance were virtually unchanged, although there was a slight positive bias.
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Index of Leading Economic Indicators The index for San Diego County that includes the components listed below (October) Source: University of San Diego
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+ 1.2 % |
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Building Permits Residential units authorized by building permits in San Diego County (October) Source: Construction Industry Research Board
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+3.12% |
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Unemployment Insurance Initial claims for unemployment insurance in San Diego County, inverted (October) Source: Employment Development Department
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+ 0.08% |
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Stock Prices San Diego Stock Exchange Index (October) Source: San Diego Daily Transcript
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+ 2.75% |
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Tourism An index of tourist activity in San Diego County (October) Source: San Diego Convention & Visitors Bureau
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+0.83% |
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Help Wanted Advertising An index of help wanted advertising in theSan Diego Union-Tribune (October) Source: Greater San Diego Chamber of Commerce
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+ 0.36% |
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National Economy Index of Leading Economic Indicators (October) Source: The Conference Board
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+ 0.30% |
The other big gainer was local stock prices. This component is calculated by taking the average daily value of the local stock index. Because October's stock market crash occurred at the end of the month, the average daily value of the stock index was not affected to a great extent. The result was a gain in October for this component. It will be future months that will be affected by the crash.
While the strong gains in building permits and local stock prices were good news, perhaps even more important was the turnaround in both labor market components. In recent months, negative trends were developing in initial claims for unemployment insurance and help wanted advertising. These trends were reversed in October. Whether a positive trend in these variables will develop is uncertain, but at least the first step has been made.
The bottom line of all of this is that the San Diego economy is ending 1997 on a spectacular note. The momentum generated will likely carry over into next year, meaning that 1998 is shaping up to be another strong year for the local economy. Next month's Index mailing will include the University of San Diego's detailed forecast for various sectors of the local economy for 1998.
October's increase puts the Index of Leading Economic Indicators for San Diego County at 139.0, up from July's reading of 137.3. There was no revision in the previously reported change of +0.7%. Revisions in the national Index of Leading Economic Indicators caused August's Index level to be changed to 136.3 instead of the previously reported 136.4. The fluctuations of the Index of Leading Economic Indicators for San Diego County for the last year are given below:
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Index |
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1996 |
OCT |
129.5 |
+0.2% |
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NOV |
130.1 |
+0.5% |
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DEC |
130.7 |
+0.4% |
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1997 |
JAN |
131.5 |
+0.6% |
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FEB |
132.6 |
+0.9% |
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MAR |
133.7 |
+0.8% |
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APR |
134.2 |
+0.3% |
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MAY |
134.5 |
+0.3% |
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JUN |
135.1 |
+0.4% |
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135.7 |
+0.4% |
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136.3 |
+0.5% |
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137.3 |
+0.7%
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OCT |
139.0 |
+1.2% |
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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:
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Professor Alan Gin |
TEL: (619) 260-4883 FAX: (619) 260-4891 E-mail: AGin@prodigy.net |
