Leading Economic Indicators Unchanged in November

Note: The tentative release date for next month's report is January 28.

January 7, 2010 -- The University of San Diego's Index of Leading Economic Indicators for San Diego County was unchanged in November. Two of the components--consumer confidence and the outlook for the national economy--were up sharply during the month, and there was also a small increase in help wanted advertising. On the downside, local stock prices took a big tumble during the month. Building permits and initial claims for unemployment were also negative, but there were only slight declines in those components.

Index of Leading Economic Indicators 
The index for San Diego County that includes the components listed below (November) 
Source: University of San Diego 
+ 0.0 % 
Building Permits 
Residential units authorized by building permits in San Diego County (November) 
Source: Construction Industry Research Board 
Unemployment Insurance 
Initial claims for unemployment insurance in San Diego County, inverted, estimated  (November) 
Source: Employment Development Department 
- 0.17% 
Stock Prices 
San Diego Stock Exchange Index (November) 
Source: San Diego Daily Transcript 
Consumer Confidence 
An index of consumer confidence in San Diego County (November) 
Source: San Diego Union-Tribune
+ 1.16% 
  Help Wanted Advertising 
An index of online help wanted advertising in San Diego (November) 
Source: Monster Worldwide
+ 0.08% 
National Economy 
Index of Leading Economic Indicators (November) 
Source: The Conference Board 

November’s unchanged reading broke a string of seven consecutive increases for the USD Index. There is no change though in the previously reported outlook for 2010. The first few months of the year may be weak, with the local unemployment rate edging up to approach 11 percent. Things will improve in the second half of the year, with a net overall gain of between 3,000 to 5,000 jobs for the year. An improving housing market will boost employment in construction, while research and development and health services will remain relatively strong. Rebounding local and national economies will stabilize employment in retailing and in the leisure and hospitality sector. However, job losses are expected to continue in manufacturing, which has lost jobs in 10 of the last 11 years.

Highlights: The roller coaster ride for residential units authorized by building permits continues with that component flipping back to the negative side after two up months. It is likely that there will be fewer than 3,000 units authorized by building permits in 2009, which would be down more than 40 percent from the previous low of 5,154 units authorized in 2008. The forecast is for 4,000 units to be authorized in 2010. . . There was significant improvement in the labor market components in November. While Initial claims for unemployment insurance still rose (a negative for the Index), the change in November was the lowest since February of 2008. The implication is that the local economy may be reaching a peak In terms of layoffs and job losses. On the hiring front, help wanted advertising turned positive for the first time after 38 consecutive monthly declines, although the gain was not large. The net result was that the local unemployment rate was 10.3 percent in November, which was down from the revised 10.7 percent rate in October but still the sixth month in a row that the local unemployment rate was in double digits. . . The trend in local consumer confidence remains positive. As has been mentioned previously, a moving average is used to determine the trend by smoothing out the month-to-month fluctuation in the data. The San Diego Union-Tribune reports that local consumer confidence is up more than 30 percent compared to the same month in 2008. . . Local stock prices fell for the third straight month even though the broader market averages were up in November. . . The outlook for the national economy continues to be positive, with the national Index of Leading Economic Indicators increasing for the seventh consecutive month. There are increasing signs that the national economy is recovering, although the Gross Domestic Product growth rate was revised downward to 2.2 percent for the third quarter.

November’s increase puts the USD Index of Leading Economic Indicators for San Diego County at 103.7, unchanged from October’s reading. A revision in the national Index of Leading Economic Indicators for September led to a change in the value of the USD Index for that month but no revision in the previously reported change of +1.0 percent. 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
2008 NOV 110.6 -2.0%
  DEC 108.2 -2.2%
2009 JAN 105.7 -2.3%
  FEB 102.9 -2.7%
  MAR 100.7 -2.2%
  APR 100.9 +0.2%
  MAY 101.2 +0.3%
  JUN 101.7 +0.5%
  JUL 101.9 +0.2%
  AUG 102.5 +0.5%
  SEP 103.5 +1.0%
  OCT 103.7 +0.2%
  NOV 103.7 +0.0%

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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