Leading Economic Indicators Up Sharply in February

Note: A computer problem delayed the release of the January report.  The tentative release date for next month's report is April 28.

March 31, 2011 -- The USD Burnham-Moores Center for Real Estate's Index of Leading Economic Indicators for San Diego County rose 1.9 percent in February, following a 0.9 percent increase in January.  February’s increase was the largest one month increase ever in the Index and was powered by the largest monthly increase in building permits on record.  Initial claims for unemployment insurance, consumer confidence, help wanted advertising, and the outlook for the national economy also had significant gains.  Local stock prices registered the smallest gain, but that was enough to make February the second month in a row where all six components in the Index were positive.  

Index of Leading Economic Indicators 
The index for San Diego County that includes the components listed below (February
Source: USD
 Burnham-Moores Center for Real Estate
+ 1.9 % 
Building Permits 
Residential units authorized by building permits in San Diego County (February)
Source: Construction Industry Research Board
+ 5.11% 
Unemployment Insurance 
Initial claims for unemployment insurance in San Diego County, inverted (February

Source: Employment Development Department 
+ 2.00% 
  Stock Prices 
San Diego Stock Exchange Index (February) 
Source: San Diego Daily Transcript 
+ 0.39%
Consumer Confidence 
An index of consumer confidence in San Diego County (February) 
Source: San Diego Union-Tribune, The Conference Board
+ 1.52% 
  Help Wanted Advertising 
An index of online help wanted advertising in San Diego (February) 
Source: Monster Worldwide
+ 1.01% 
National Economy 
Index of Leading Economic Indicators (February)
Source: The Conference Board 
+ 1.55% 

With gains in January and February, the USD Index has now risen or been unchanged for nearly two years (23 consecutive months).  February’s record gain suggests a pickup in the pace of the local economic recovery, which has been slow.  While the local economy has added almost 23,000 jobs since the depths of the recession in January 2010, that represents a recovery of less than 20 percent of the more than 122,000 jobs the local economy lost from the peak in December 2007.  One result is that the local unemployment rate remains high, topping the 10 percent mark for 21 straight months through February.

 Highlights:  Residential units authorized by building permits more than doubled in the first two months of 2011 compared to the same period in 2010.  Single-family units authorized were actually down through February, but there were more than five times the number of multi-family units authorized than was the case in 2010. . . Both labor market variables were strong in February, with initial claims for unemployment insurance hitting their best level since September of 2008 and help wanted advertising at its highest level since November of 2008.  The net result was that the local unemployment rate fell to 10.1 percent in February, down from 10.4 percent in January. . . Local consumer confidence continues to rebound despite higher gas prices and a stubbornly high unemployment rate.  Starting this month, changes in the national index of consumer expectations will be used to approximate local consumer confidence, as that data is no longer available. . . Local stock prices extended the gains seen at the end of 2010 and have now advanced for seven consecutive months. . . Prospects for the national economy remain positive, with the national Index of Leading Economic Indicators increasing for the eighth month in a row and 21st time in 23 months.  The pace of national economic growth is slowly accelerating, with the GDP growing at a 3.1 percent annualized rate in the fourth quarter, up from 1.7 percent in the second quarter and 2.6 percent in the third quarter.

 February’s increase puts the USD Index of Leading Economic Indicators for San Diego County at 114.0, up from January’s reading of 111.8.  Revised data for building permits for December led to an upward revision of the previously reported increase of 0.3 percent to 0.5 percent and the level of the Index from to be revised from 110.7 to 110.8.  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
2010 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%
  JUL 110.0 +0.3%
  AUG 110.0 +0.0%
  SEP 110.0 +0.0%
  OCT 110.0 +0.0%
NOV 110.2 +0.3%
  DEC 110.8 +0.5%
2011 JAN 111.8 +0.9%
  FEB 114.0 +1.9%

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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