Leading Economic Indicators
Down in September
10, 2006 --The University of San Diego's Index of Leading Economic Indicators
for San Diego County fell 0.6 percent in September. Three components -- building
permits, initial claims for unemployment insurance, and help wanted advertising
-- were negative during the month, with the first two down sharply. Local stock
prices, consumer confidence, and the outlook for the national economy were
positive, but only slightly so.
||Index of Leading Economic
The index for San Diego County that
includes the components listed below (September)
Source: University of San Diego
|- 0.3 %
Residential units authorized by building
permits in San Diego County (September)
Source: Construction Industry Research
Initial claims for unemployment insurance
in San Diego County, inverted (September)
Source: Employment Development Department
San Diego Stock Exchange Index (September)
Source: San Diego Daily Transcript
An index of consumer confidence in San
Diego County (September)
Source: San Diego Union-Tribune
||Help Wanted Advertising
An index of print and online help wanted advertising in
San Diego (September)
Source: Monster Worldwide, San Diego Union-Tribune
Index of Leading Economic Indicators (September)
Source: The Conference Board
With September's decrease, the USD Index of
Leading Economic Indicators has now fallen for six months in a row.
One positive development was that the number of advancing components to
declining ones was even at three apiece. This
was the first time that the ratio had not been negative since the Index began
its slide in the spring. As previously indicated in this space, job growth is
expected to cool considerably in the year ahead.
Other areas that will feel the impact of this slowing will be the housing
market, where prices and sales are expected to remain weak for most of the 2007,
and in retail sales.
Residential units authorized by building permits continued
to slide as homebuilders reacted to the weak housing market by reducing
construction activity. Residential
units authorized through the end of the third
quarter of 2006 were down 32 percent compared to the same period in 2005.
Single-family units authorized bore the brunt of the decline, having
dropped more than 40 percent compared to last year.
Multi-family units authorized were down a smaller but still significant
22 percent. . . The labor market variables remain weak.
Initial claims for unemployment insurance rose for the sixth
straight month, albeit from historically low levels.
On the hiring side of the job market, help wanted advertising fell
in September as online advertising
pulled back after a strong increase in August. The weakest sector for online
advertising was food preparation and serving due to the ending of the summer
tourism season. There is not enough data yet on online advertising to do
seasonal adjustment at this point. Despite
the weakness in the labor market variables, the local unemployment rate fell
below the 4 percent mark to finish at 3.9 percent for September. . .
Falling gas prices gave local consumer confidence a boost in
September as prices fell below $3 a gallon for the first time in months. . . Local
stock prices finally joined the rally in stocks that saw the Dow Jones
Industrial Average hitting new
highs. This illustrates that much of the current stock market rally has been in
the large capitalization companies represented by the Dow more than in the
smaller capitalization stocks of the Nasdaq, where many
companies are listed. . . The news on the
national economy was mixed, with the national Index of Leading Economic
Indicators edging up slightly in September.
At the same time, initial estimates showed that the Gross Domestic
Product (GDP) grew at an anemic 1.6 percent rate in for the third quarter of
increase puts the Index of Leading Economic Indicators for
at 141.0, down from August’s reading of
141.4. There were no revisions in
any of the previously reported data. The values for the Index of Leading
Economic Indicators for
for the last year are given below:
For more information on the University of San Diego's Index of Leading
Economic Indicators, please contact: