Leading Economic Indicators
Down in October
Note: Due to the holidays,
the release date for next month’s report is uncertain.
November 30, 2011 --
The USD Burnham-Moores Center for Real Estate’s Index of Leading Economic
Indicators for San Diego County fell 0.2 percent in October.
For the fourth straight month, half of the components were up and half
were down. Sharp decreases in consumer
confidence and residential units authorized by building permits outweighed a
strong increase in the outlook for the national economy and a moderate gain in
help wanted advertising to push the USD Index to a loss.
Initial claims for unemployment insurance (positive) and local stock
prices (negative) were virtually unchanged and offset each other.
October’s decline pushed the string of alternating declines
and advances in the USD Index to six straight months.
With no turning point being signaled, the outlook for the local economy
remains unchanged from what was previously reported:
positive but weak growth through at least the first half of 2012.
One positive development is that the labor market is picking up a little
in terms of job growth. Job growth
for October was 24,000 when compared with the same month in 2010.
That was the highest year-over-year increase in jobs since May 2005.
The biggest year-over-year gains were in leisure and hospitality (+6,400
jobs), health care (+5,900), administrative and support services (+5,500), and
professional, scientific and technology services (+3,100).
The only sector that suffered a loss of jobs was construction (down
1,400), which reflects the continued weakness in the housing and other real
Residential units authorized by building permits
fell for the fifth consecutive month.
Due to strength at the beginning of the year, total units authorized are
on a pace to top 4,900 in 2011.
While this is up substantially compared to 2010, this would still make 2011 the
third worst year ever for residential units authorized.
Also problematic is that most of the increase is due to a surge in
multi-family units authorized. While
that provides needed rental housing, multi-family construction employs fewer
workers than the construction of a comparable number of single-family units. . .
Both labor market variables were positive in October.
Initial claims for unemployment insurance
were positive but almost unchanged, while help
wanted advertising rose for the 10th straight month.
The net result was that the local unemployment rate fell to 9.7 percent
in October from a revised 9.8 percent in September. . . Consumer confidence
fell for the fifth time in six months.
Despite the weakness in confidence, consumers got the holiday buying
season off to a strong start with record sales on “Black Friday” and “Cyber
Monday”. . . Local stock prices were actually 8.1 percent higher at the
end of October than at the beginning.
But the USD Index calculates stock prices by taking the average daily
close for the entire month. When
doing this for October and comparing to September, local stock prices ended up
down slightly. . . The national Index of Leading Economic Indicators rose
for the sixth month in a row and registered its biggest gain since November of
last year. This suggests continued
positive growth for the national economy.
While no “double dip” downturn is expected in the near future, the
outlook continues to be for slow growth.
This is epitomized by the second estimate for Gross Domestic Product for
the third quarter coming in at 2.0 percent, down from the previously reported
“advance” estimate of 2.5 percent.
October’s decrease puts the
USD Index of Leading Economic Indicators for San Diego County at 115.9, down
from 116.1 in September. 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: