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Leading Economic Indicators
Up in June
Note:
The
tentative release date for next month's report is August 27.
July 28, 2009 -- The
University of San Diego's Index of Leading Economic Indicators for San Diego County rose 0.4 percent in June. The recent
pattern of a sharp rise in consumer confidence supported by solid advances in
building permits, local stock prices, and the outlook for the national economy
pushed the USD Index to its third gain in a row after being down the previous 24
months. The positive news is
tempered somewhat by the fact that initial claims for unemployment insurance and
help wanted advertising both continue to be sharply negative.
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Index of Leading Economic
Indicators
The index for San Diego County that
includes the components listed below (June)
Source: University of San Diego |
+ 0.4 % |
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Building Permits
Residential units authorized by building
permits in San Diego County (June)
Source: Construction Industry Research
Board |
+ 0.68% |
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Unemployment Insurance
Initial claims for unemployment insurance in San Diego
County, inverted, estimated (June)
Source: Employment Development Department |
- 2.89% |
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Stock Prices
San Diego Stock Exchange Index (June)
Source: San Diego Daily Transcript |
+ 0.88% |
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Consumer Confidence
An index of consumer confidence in San
Diego County (June)
Source: San Diego Union-Tribune |
+ 4.65% |
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Help Wanted Advertising
An index of online help wanted advertising in
San Diego (June)
Source: Monster Worldwide |
- 2.26% |
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National Economy
Index of Leading Economic Indicators (June)
Source: The Conference Board |
+1.38% |
With its third consecutive increase, the USD Index has given
the traditional signal of a turning point in the local economy. The
typical time frame involved with the local leading indicators would suggest a
possible bottom in the first half of 2010. That bottom would take the form
of continued strong home sales, a pickup in retail sales, and a stabilization of
the labor market. Reasons for the reversal would include the continued
rebound in home sales due to low prices and interest rates, relatively low gas
prices, the impact of the federal stimulus package and other programs to deal
with the economy, and a turnaround in the national economy. As has been
mentioned previously, the rebound from the bottom is likely to be weak; indeed,
the local economy could remain at the bottom for a while before it starts to
grow significantly again.
Highlights:
Residential units authorized by building permits continue to rebound from
the historic lows set in January and February, but still ended the first half of
2009 down 47 percent compared to the same period in 2008. Single-family units were off 36 percent during that period, while
multi-family units were down 56 percent. . . The employment situation remains
grim. There were more than 37,000
initial claims for unemployment insurance filed during June, a record high
number. The raw data for help
wanted advertising has been steady over the last few months, but the
seasonally adjusted trend remains sharply negative.
The net result was that the local unemployment rate topped the 10 percent
mark, hitting 10.1 percent in June with year-over-year job loss totaling almost
55,000. . . Another strong performance pushed local consumer confidence
to a level nearly 16 percent higher than in June 2008.
As has been the case in recent months, consumers' views of the current
situation remain depressed, but the outlook for the future has brightened
considerably. . . Local stock
prices moved up for the third month in a row as the financial markets
continue to rally from the March lows. . . Like the local index, the national
Index of Leading Economic Indicators advanced for the third month in a row,
signaling a potential turning point for the national economy.
Expectations among many economists are for another down quarter (the
fourth in a row) for Gross Domestic Product (GDP) growth in the second quarter,
with GDP growth turning positive in the second half of 2009.
This would help San Diego companies with
national markets, as well as the local tourism industry.
GDP growth for 2009 as a whole is expected to be in the -1.0 to -2.0
percent range.
June's decrease puts the USD Index of Leading Economic Indicators for San Diego County
at 101.6, up from May's reading of 101.2.
There were revisions to the data for building permits in May and the
national Index of Leading Economic Indicators in April and May, but they did not
affect the percentage change or the previously reported level of the USD Index
for those months. 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:
For more information on the University of San Diego's Index of Leading
Economic Indicators, please contact:
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