Leading Economic Indicators Up in June

Note: The tentative release date for next month's report is August 26.

July 28, 2010 -- The University of San Diego's Index of Leading Economic Indicators for San Diego County rose 0.2 percent in June. For the second time in three months, advancing components and declining ones were even at three apiece. The gain was led by a sharp rise in building permits and help wanted advertising. There was also a moderate increase in local consumer confidence. These offset a big drop in local stock prices and smaller declines in initial claims for unemployment insurance and the outlook for the national economy to push the USD Index to its 15th consecutive monthly gain.

Index of Leading Economic Indicators 
The index for San Diego County that includes the components listed below (June
Source: University of San Diego
+ 0.2 % 
Building Permits 
Residential units authorized by building permits in San Diego County (June)
Source: Construction Industry Research Board
+ 1.59% 
Unemployment Insurance 
Initial claims for unemployment insurance in San Diego County, inverted (June

Source: Employment Development Department 
- 0.58% 
Stock Prices 
San Diego Stock Exchange Index (June) 
Source: San Diego Daily Transcript 
- 1.12%
Consumer Confidence 
An index of consumer confidence in San Diego County (June) 
Source: San Diego Union-Tribune
+ 0.44% 
  Help Wanted Advertising 
An index of online help wanted advertising in San Diego (June) 
Source: Monster Worldwide
+ 1.24% 
National Economy 
Index of Leading Economic Indicators (June) 
Source: The Conference Board 
- 0.35% 

The gain in June continues the recent trend of positive but modest increases for the USD Index. The outlook for the local economy remains for continued growth but at a slow pace, meaning that it will take much longer to recover from the "Great Recession" than it took to get into it. In 2008 and 2009, the local economy lost nearly 80,000 jobs. The projection is that it will take three, four, or even five years to regain all of those jobs. There is some encouraging news for the labor market as help wanted advertising in June reached its highest level since December 2008. Monster.com reports that the areas showing the biggest gains were management, business and financial operations, protective services, maintenance and repair, production, and transportation.

Highlights: Residential units authorized by building permits reached their highest level since August 2008. Residential units authorized ended the first half up 28 percent compared to the same period in 2009. The bulk of the gain came in single-family units, which were up almost 48 percent in the first half, while multi-family units were up only 3 percent. The 342 single-family units authorized in June was the highest monthly total in two years (since June 2008). . . The labor market components remain mixed. Job losses continue to be a problem, as initial claims for unemployment insurance rose for the third straight month, which is a negative for the Index. The hiring side of the market was positive, as help wanted advertising registered its biggest one month gain since July 2002. The net result was that the local unemployment rate rose to 10.5 percent in June from a rate of 10.1 percent in May. . . The trend in local consumer confidence continues to rebound from recent lows with the moving average for that component up now two months in a row . . . Local stock prices suffered a second consecutive big drop as the financial markets continue to worry about the status of the economic recovery. . . The national Index of Leading Economic Indicators fell for the second time in three months (the April change was initially negative, was revised to unchanged, and then revised to negative once again), adding to the uncertainty as to the course of the national economy. The "advance" estimate of second quarter Gross Domestic Product (GDP) had not been released as of the writing of this report, but the growth rate in the first quarter was revised downward from 3.0 percent to 2.7 percent in the "third" estimate for that quarter.

June’s increase puts the USD Index of Leading Economic Indicators for San Diego County at 109.9, up from May’s revised reading of 109.5, up from the originally reported level of 109.4. Revisions in the data for building permits, initial claims for unemployment insurance, and the national Index of Leading Economic Indicators caused the change for the month to be revised up to a gain of 0.3 percent instead of the previously reported gain of 0.2 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
2009  JUN 102.9 +0.9%
  JUL 103.6 +0.6%
  AUG 104.5 +0.9%
  SEP 105.8 +1.2%
  OCT 106.3 +0.5%
  NOV 106.5 +0.1%
  DEC 107.2 +0.7%
2010 JAN 107.7 +0.5%
  FEB 107.9 +0.2%
  MAR 109.0 +1.0%
  APR 109.2 +0.1%
  MAY 109.5 +0.3%
  JUN 109.7 +0.2%

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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