December=s decline was the fourth large drop (one percent or more) in the last five months, and the Index has now fallen in 20 of the last 21 months.  Although the local economy is not in a recession in the sense that there has been a loss of jobs or a drop in Gross Regional Product,  economic activity has slowed considerably.  Initial data for 2007 shows an increase of 10,700 jobs for the year, compared to a gain of 17,800 jobs in 2006, and the unemployment rate is approaching 5 percent.  Combined with slow housing sales and a surge in foreclosures, we are probably in the San Diego-equivalent of a recession at this point.  That weakness is expected to continue for most of 2008, with a projected job gain of only 5,000 - 8,000 for the year.

 Highlights: Despite a gain in December, residential units authorized by building permits declined by 31 percent in 2007 compared to 2006.  Both single-family units (down 26 percent) and multi-family units (down 35 percent) were hurt by the slump. . . The labor market variables continue to be weak, with both initial claims for unemployment insurance and help wanted advertising  in long and deep slides.  The net impact was that the local unemployment rate edged up to 4.9 percent in December, a sharp rise from the 3.7 percent unemployment rate in December 2006. . . Local consumer confidence fell for the eighth month in a row as bad news about the housing market and foreclosures dominated the news.  Local consumer confidence finished the year down almost 22 percent . . .  Although the stock market has slumped considerably in January, local stock prices were off just slightly in December. . . The national Index of Leading Economic Indicators fell for the third straight month in December.  Economists consider three consecutive monthly changes in one direction as a sign of a potential turning point in the economy, so this suggests a possible downturn in the national economy.  One sign of this is that the growth rate of GDP was an anemic 0.6 percent in the fourth quarter compared to 4.9 percent in the third quarter.

 December=s decrease puts the USD Index of Leading Economic Indicators for San Diego County at 128.8, down from November=s reading of 130.0. Revisions in building permits, initial claims for unemployment insurance and the national Index of Leading Economic Indicators impacted the value of the Index and the monthly changes for every month going back to July.  Please visit the Website address given below to see the revised changes for the individual components.  The values for the USD Index for the last year are given below:

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