Leading Economic Indicators
Up in April
Note: The tentative release date for next month's
report is June 28.
May 31, 2011 -- The USD Burnham-Moores
Center for Real Estate's Index
of Leading Economic Indicators for San Diego County rose 0.9 percent in April.
The increase was led by sharp gains in building permits and help wanted
advertising and was supported by moderate gains in initial claims for
unemployment insurance, local stock prices, and local consumer confidence.
These far outweighed a decline in the outlook for the national economy to
push the USD Index to its 22nd gain in 25 months (with the other
three months unchanged).
The outlook for the local economy remains unchanged from
recent months. Positive economy
growth is expected for the local economy for the rest of 2011, even though the
economic news is decidedly mixed.
The national economy is growing, but that growth slowed in the first quarter due
to high gas prices and cuts in government expenditures.
Local employment is increasing, but the increase is slow when compared to
the job losses the local economy suffered during the downturn.
Housing prices in San Diego are up since the 2009 lows as measured by the
S&P/Case-Shiller Home Price Index, but have fallen in each of the last three
months. The latter is despite the
fact that interest rates are at historic lows, employment is picking up, and new
home inventory is low due to low single-family home construction.
It is said that stock prices climb a “wall of worry.”
Whether that applies to the general economy remains to be seen.
Residential units authorized by building permits
continue to surge upward. Through
the first four months of 2011, residential units authorized are nearly double
what they were in the same period in 2010.
While single-family units are still down for this period, multi-family
units authorized are now nearly five times the level of last year and are double
the amount of single-family units.
As a point of comparison, the ratio was reversed in 2010, when single-family
units authorized were twice as much as multi-family units for the entire year. .
. For the fourth month in a row, both labor market variables
(initial claims for unemployment insurance
and help wanted advertising) were positive.
On the latter, the Monster
Employment Index for San Diego topped 80 for the first time since November 2008.
The net result was that the local unemployment rate fell to 9.8 percent
in April, down from 10.2 percent in March.
While April is usually a good month for employment as firms gear up for
the summer tourism season, this was still the first time the local unemployment
rate has been under 10 percent since May 2009. . . The trend in local
consumer confidence remains positive despite high gas prices, and has now
been up for a full year. This is
significant given the large role that consumer spending plays in the local
economy. . . After falling in March, local stock prices resumed their
advance in April and have now been up in eight of the last nine months. . . The
outlook for the national economy turned negative as the national Index of
Leading Economic Indicators dropped for the first time in 10 months.
The national economy showed signs of slowing as the second estimate of
GDP growth for the first quarter of 2011 was at a 1.8 percent annualized rate,
down from the “advance” estimate of 3.2 percent reported last month.
increase puts the USD Index of Leading Economic Indicators for San Diego County
at 116.3, up from March's
reading of 115.3. Revised data for
building permits and the national Index of Leading Economic Indicators led to
revisions in the value of the Index for December through February and in the
previously reported changes for December and March.
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: