Leading Economic Indicators
Down in April
26, 2005 --The University of San Diego's Index of Leading Economic Indicators
for San Diego County fell 0.5 percent in April.
The decline was led by another sharp drop in consumer confidence.
Four other components--building permits, initial claims for unemployment
insurance, local stock prices, and the outlook for the national economy--were
down by small to moderate amounts. Only
one component, help wanted advertising, was positive, and that only slightly so.
||Index of Leading Economic
The index for San Diego County that
includes the components listed below (April)
Source: University of San Diego
|- 0.5 %
Residential units authorized by building
permits in San Diego County (April)
Source: Construction Industry Research
Initial claims for unemployment insurance
in San Diego County, inverted (April
Source: Employment Development Department
San Diego Stock Exchange Index (April)
Source: San Diego Daily Transcript
An index of consumer confidence in San
Diego County (April)
Source: San Diego Union-Tribune
||Help Wanted Advertising
An index of help wanted advertising in the
San Diego Union-Tribune (April)
Source: San Diego Union-Tribune
Index of Leading Economic Indicators (April)
Source: The Conference Board
decrease, the USD Index of Leading Economic Indicators has now decreased for
four months in a row. The breadth of
the decline continues to be broad. For
the third straight month, five of the six components were negative.
Although a downturn in the local economy is unlikely in 2005, the outlook
is for a weakening to occur in the second half of the year.
Job growth will remain positive, but the local unemployment rate
is likely to rise by the end of the year.
Residential units authorized by building permits opened the second
quarter on a down note, and are now down for the year compared to the same time
period in 2004. This is worrisome
because some of the stronger areas in terms of employment growth have been
construction employment and employment in real estate related activities. . .
The labor market variables were mixed. Although
initial claims for unemployment insurance have been negative for the last
five months, the changes have not been large.
The implication is that, while the rate of job loss is increasing, the
increase is not dramatic. On the
hiring side of the market, help wanted advertising has been virtually
flat for the last three months. Despite
these mixed results, the unemployment rate in San Diego dropped from 4.3% in
March to 4.0% in April. . . The trend in consumer confidence continues to
deteriorate. Although the raw
consumer confidence number increased in April compared to March, the USD Index
uses a moving average to smooth out the month-to-month fluctuations in the more
volatile components. Local consumer
confidence has fallen more than 15% since its peak in July 2004.
High gas prices and the fiscal and political problems of the city of San
Diego are among the likely causes of drop. . . April was another down month
for local stock prices, as high oil prices and sluggishness in the
national economy raised concerns about the outlook for corporate earnings. . .
With a small increase in February revised to a small decrease, the national
Index of Leading Economic Indicators has now fallen for four months in a
row. Like the local index, the
biggest contributor to the national downturn was a downturn in consumer
expectations, which is significant since consumer spending is roughly two-thirds
of all economic activity.
decrease puts the Index of Leading Economic Indicators for San Diego County at
141.8, down from March's revised reading of 142.5.
Despite revisions in initial claims for unemployment insurance and the
national Index of Leading Economic Indicators, there was no change in the
previously report change of -0.4% for March.
The values for the Index of Leading Economic Indicators for San Diego
County for the last year are given below:
For more information on the University of San Diego's Index of Leading
Economic Indicators, please contact: