Leading Economic Indicators Down Sharply in February

March 27, 2008 -- The University of San Diego's Index of Leading Economic Indicators for San Diego County fell 1.1 percent in February after falling 1.2 percent in January.  The biggest contributors to the decline were sharp drops in consumer confidence and help wanted advertising.  Down more moderately were building permits, local stock prices, and the outlook for the national economy.  The only positive component was initial claims for unemployment insurance, which reflects a large drop in claims for the month.

Index of Leading Economic Indicators 
The index for San Diego County that includes the components listed below (February) 
Source: University of San Diego 
- 1.1 % 
Building Permits 
Residential units authorized by building permits in San Diego County (February) 
Source: Construction Industry Research Board 
- 0.44% 
Unemployment Insurance 
Initial claims for unemployment insurance in San Diego County, inverted, estimated (February) 
Source: Employment Development Department 
+ 1.37% 
  Stock Prices 
San Diego Stock Exchange Index (February) 
Source: San Diego Daily Transcript 
Consumer Confidence 
An index of consumer confidence in San Diego County (February) 
Source: San Diego Union-Tribune
- 3.87% 
Help Wanted Advertising 
An index of online help wanted advertising in San Diego (February) 
Source: Monster Worldwide
- 2.66% 
National Economy 
Index of Leading Economic Indicators (February) 
Source: The Conference Board 

With February's decrease, the USD Index has now fallen in 22 of the last 23 months, with the declines in the last five months being relatively severe.  While there has not been a massive loss of jobs as was the case in the early 1990s, job growth has come to a virtual standstill, with only 300 more jobs countywide in February compared to the year before.  The weak housing market remains the culprit, with more than 13,000 jobs lost in real estate-related sectors compared to a year ago.  The continued sharp declines in the Leading Indicators indicate no turnaround in sight at the current time.

Highlights: After falling in 2007 to their lowest level since 1996, residential units authorized by building permits stumbled out of the gate in 2008.  The 146 single-family units authorized in February were the lowest number in a month since November 1992. . . The labor market variables were mixed in both January and February.  Initial claims for unemployment insurance dropped after a big surge in October and November, indicating at least a temporary slowing in the rate of job loss locally.  On the hiring side of the labor, help wanted advertising continued to fall, as employers become cautious in the face of a slowing economy.  Due to structural changes in the help wanted advertising market, this component will now only consider Monster.com's measure of online advertising.  The net impact was that the local unemployment rate hit and topped the 5 percent level in each of the last three months. . . Local consumer confidence fell to its lowest level since the San Diego Union-Tribune started gathering the data in 1996.  Their index has fallen nearly 40 percent from the year-ago level . . .  The weakness in the financial markets affected local stock prices heavily in January and to a lesser extent in February.  . . February's decline in the national Index of Leading Economic Indicators was the fifth in a row for that component.  More and more macroeconomic data suggests that the national economy is headed towards a recession, if it is not already in one.  Among other things, payroll employment has fallen by 85,000 jobs in the first two months of 2008.  It remains to be seen whether the unprecedented action by the Federal Reserve in drastically reducing interest rate will be enough to turn the national economy around..

February's decrease puts the USD Index of Leading Economic Indicators for San Diego County at 125.1, down from January's reading of 126.5. 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 the months August through December.  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:


% Change
2007 FEB 139.2 -0.3%
  MAR 139.3 +0.1%
  APR 139.1 -0.1%
  MAY 138.4 -0.5%
  JUN 137.3 -0.8%
  JUL 136.8 -0.4%
  AUG 134.6 -1.6%
  SEP 133.5 -0.8%
  OCT 131.7 -1.4%
  NOV 129.4 -1.8%
  DEC 128.1 -1.0%
2008 JAN 126.5 -1.2%
  FEB 125.1 -1.1%

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