Leading Economic Indicators Down Slightly in April

June 7, 2007 -- The University of San Diego's Index of Leading Economic Indicators for San Diego County fell 0.1 percent in April after falling 0.3 percent in February and rising 0.2 percent in March.  Leading the way to the downside in April were big drops in help wanted advertising and the outlook for the national economy.  Building permits were also down, but to a lesser extent.  The big gainer for the month was local stock prices, while initial claims for unemployment insurance and consumer confidence were moderately positive.

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 
- 0.49% 
Unemployment Insurance 
Initial claims for unemployment insurance in San Diego County, inverted (April) 
Source: Employment Development Department 
+ 0.46% 
Stock Prices 
San Diego Stock Exchange Index (April) 
Source: San Diego Daily Transcript 
+ 1.12%
Consumer Confidence 
An index of consumer confidence in San Diego County (April) 
Source: San Diego Union-Tribune
+ 0.52% 
Help Wanted Advertising 
An index of print and online help wanted advertising in San Diego (April) 
Source: Monster Worldwide, San Diego Union-Tribune
- 0.90% 
National Economy 
Index of Leading Economic Indicators (April) 
Source: The Conference Board 
- 0.99% 

April's decline was the twelfth in 13 months for the USD Index of Leading Economic Indicators.  March's increase broke a string of 11 consecutive monthly decreases for the Index.  While still decidedly negative, the weakness is not universal, as the number of advancing components continues to match the number of declining ones.  The outlook is for continued weakness in the local economy through the end of 2007 and possibly into the first part of 2008.  That weakness will not likely reach the stage of a recession, but will manifest itself in slower job growth, higher unemployment, continued slow home sales, and a general decline in economic activity, including sales and income growth. 

Highlights: The weak housing market continues to take a toll on construction activity, with residential units authorized by building permits down about 13 percent in the first quarter of 2007 compared to the same period in 2006.  As was the case for most of 2006, the slowdown is disproportionately in the permits for single-family housing, which were off by nearly 26 percent, compared to a 3 percent decline in multi-family permits. . . The labor market variables have turned mixed.  Initial claims for unemployment insurance have fallen for three straight months, which is a positive for the Index as it means fewer jobs being lost.  However, help wanted advertising has decreased for eight months in a row.  Most of this is due to a big drop in print advertising, as online advertising actually increased in April.  The net result was that the local unemployment rate edged up to 4.1 percent from 3.7 percent one year ago. . . Despite gas prices reaching record highs, local consumer confidence continues to climb.  That component has been up in each of the last eight months. . . After dropping with the rest of the markets in March,  local stock prices followed the advance of those markets to all-time highs April as investors anticipate the Federal Reserve lowering interest rates. . . The national economy is weakening rapidly and the forecast is for more of the same, as the  national Index of Leading Economic Indicators has dropped in three of the last four months.  GDP growth in the first quarter came in at a very slow 0.6 percent.   That hurts the San Diego economy in two ways: First, local firms who do business on a nationwide basis will see slower sales.  And the local tourism industry would be hurt by a slowing national economy as people cut back their travel plans.

April's decrease puts the USD Index of Leading Economic Indicators for San Diego County at 139.5, down from March's reading of 139.6.  There were revisions in various components for November, December, and January, some of which affected the previously reported values and changes for the Index.  Please visit the Website address given below to see the revised changes for the individual components of the Index.  The values for the USD Index for the last year are given below:


% Change
2006 APR 143.8 -0.3%
MAY 142.7 -0.7%
JUN 142.4 -0.2%
JUL 142.1 -0.2%
AUG 141.2 -0.6%
SEP 140.9 -0.2%
OCT 140.7 -0.1%
NOV 140.4 -0.3%
DEC 140.0 -0.3%
2007 JAN 139.7 -0.2%
  FEB 139.3 -0.3%
  MAR 139.6 -0.2%
  APR 139.5 -0.1%

Home - All Months

For more information on the University of San Diego's Index of Leading Economic Indicators, please contact:

Professor Alan Gin 
School of Business Administration 
University of San Diego 
5998 Alcalá Park 
San Diego, CA 92110 
TEL: (858) 603-3873 

FAX: (858) 484-5304 

E-mail: agin@san.rr.com