Leading Economic Indicators
Up in December
Note: Due to the holidays and travel,
the release of November's report was delayed and there is no separate report for
that month. The tentative release date for next month’s report is February
January 31, 2012 --
The USD Burnham-Moores Center for Real Estate’s Index of Leading Economic
Indicators for San Diego County rose 0.6 percent in December.
Although no component was up sharply, the gain was broad-based, with five
of the six components—building permits, initial claims for unemployment
insurance, consumer confidence, help wanted advertising, and the outlook for the
national economy--up solidly during the month.
The only negative component was local stock prices, and they were down
only slightly. The gain marked the first
time that the USD Index was up in consecutive months since May, and snapped a
string of six straight months where it had alternated between being positive and
Given the back-to-back gains in the USD Index and the breadth
of December’s gain, the outlook for the local economy remains positive for 2012.
The local economy is expected to add 20,000 to 25,000 wage and salary
jobs during the year, which may be pessimistic, given that employment was up
nearly 27,000 in December compared to the same month in 2010.
Things expected to hold the local economy back include continued weakness
in the housing market, political conflict in an election year, and uncertainty
in the international economy.
Residential units authorized by building permits
finished the year on a strong note, with total units authorized for the year as
a whole up 56 percent compared to 2010.
All of the gain was in multi-family units, which were up 170 percent for
the year. Single-family units
authorized were flat, being down a single unit compared to 2010.
Although much better than the last two years, 2011 is still the third
worst year ever for residential units authorized. . . Both labor market
variables were up during the month.
While Initial claims for unemployment insurance
have been positive for three months,
help wanted advertising
has now increased every month for an entire year.
This pushed that component to its highest level since October 2008 on a
seasonally adjusted basis.
The net result was that the local unemployment rate fell
below 9 percent for the first time since April 2009.
The local unemployment rate was 8.9 percent in December, down from 9.2
percent in November. . . Consumer confidence rebounded in December and
has now returned to the level it was at prior to its collapse in August, when
the debt ceiling debate and the downgrade of U.S. debt by Standard and Poor’s
rattled consumer sentiment . . . Local stock prices ended a down year
with a virtually flat month in December.
For the year, local stocks lost 9.4 percent, which compares negatively
with a gain of 5.5 percent in the Down Jones Industrial Average and losses of
0.1 percent and 1.8 percent in the S&P 500 and the NASDAQ Composite Indexes,
respectively. . . The outlook for the national economy remains solid, with the
national Index of Leading Economic Indicators up for the eighth straight
month. Although below expectations,
the “advance” estimate for the Gross Domestic Product for the fourth quarter was
2.8 percent, making it the strongest quarter of 2011.
December’s increase puts the USD Index of Leading Economic
Indicators for San Diego County at 116.8, up from 116.1 in November.
Although there were revisions in the
data for building permits and the national Index of Leading Economic Indicators,
there was no revision to the previously reported change or the level of the USD
Index for September. 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: