Leading Indicators Up Slightly In April

June 10, 1998--The University of San Diego's Index of Leading Economic Indicators for San Diego County rose 0.1 percent in April. A moderate increase in consumer confidence led the month's move. Smaller contributions to the gain were made by local stock prices, help wanted advertising, and the outlook for the national economy. Initial claims for unemployment insurance were virtually unchanged, although with a slight positive bias. The only negative component was building permits, which declined for the forth consecutive month

	Index of Leading Economic Indicators  The index for San Diego County that includes the components listed below (April) Source: University of San Diego	+ 0.1 %
	Building Permits  Residential units authorized by building permits in San Diego County (April)  Source: Construction Industry Research Board	-1.20%
	Unemployment Insurance  Initial claims for unemployment insurance in San Diego County, inverted (April)  Source: Employment Development Department	+0.02%
	Stock Prices  San Diego Stock Exchange Index (April)  Source: San Diego Daily Transcript	+0.47%
	Consumer Confidence  An index of consumer confidence in San Diego County (April)  Source: San Diego Union-Tribune	+0.78%
	Help Wanted Advertising  An index of help wanted advertising in the San Diego Union-Tribune (April)  Source: Greater San Diego Chamber of Commerce	+ 0.19%
	National Economy  Index of Leading Economic Indicators (April)  Source: The Conference Board	+ 0.16%

April's gain was the 37th consecutive monthly increase in the Index. As was the case in March, the increase was less spectacular than some of the advances in recent months. At this point, none of the positive components is strong on a consistent basis. Most are edging upward slowly. But the fact that most of the components are positive is a good sign, as is the fact that they outweigh the one negative component, building permits. Thus, the outlook for the local economy remains positive for the rest of 1998.

Of the positive components, consumer confidence registered the biggest gain. This is significant because consumer spending represent a large portion of the regional economy. Consumer confidence is a good leading indicator because when consumers are more confident, consumer spending increases, which leads to increased economic activity and eventually more jobs. The reverse would be true if consumer confidence falls.

Something that should be carefully examined in the coming months is the labor market variables (initial claims for unemployment insurance and help wanted advertising). While they were both positive in April, their rate of increase has slowed considerably. The implication is that the County's unemployment rate may have reached a bottom and will edge upward in the coming months. It should be remembered, though, that the unemployment rate was at the very low level of 3.3% in April, and a slight increase from that level would not be particularly worrisome.

April's increase puts the Index of Leading Economic Indicators for San Diego County at 142.9, up from March's reading of 142.8. There was no revision to the previously reported change of +0.1 for March. The fluctuations of the Index of Leading Economic Indicators for San Diego County for the last year are given below:

		Index	Change
1997	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	+0.6%
1998	JAN	142.0	+0.4%
	FEB	142.6	+0.4%
	MAR	142.8	+0.1%
	APR	142.9	+0.1%

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