Leading Economic Indicators Up Slightly in September

Note: The tentative release date for the 20th anniversary edition of the Leading Economic Indicators is October 25.

October 28, 2011 -- The USD Burnham-Moores Center for Real Estate’s Index of Leading Economic Indicators for San Diego County rose 0.1 percent in September.  The month was uneventful, with none of the six components changing significantly.  Moderate gains in consumer confidence, help wanted advertising, and the outlook for the national economy outweighed smaller declines in building permits, initial claims for unemployment insurance, and local stock prices to push the USD Index to a modest gain after a sharp decline in August.    

Index of Leading Economic Indicators 
The index for San Diego County that includes the components listed below (September
Source: USD
 Burnham-Moores Center for Real Estate
+ 0.1 % 
Building Permits 
Residential units authorized by building permits in San Diego County (September)
Source: Construction Industry Research Board
- 0.62% 
Unemployment Insurance 
Initial claims for unemployment insurance in San Diego County, inverted (September

Source: Employment Development Department 
- 0.13% 
Stock Prices 
San Diego Stock Exchange Index (September) 
Source: San Diego Daily Transcript 
- 0.21%
Consumer Confidence 
An index of consumer confidence in San Diego County, estimated  (September)
Source: The Conference Board
+ 0.65% 

Help Wanted Advertising 
An index of online help wanted advertising in San Diego (September) 
Source: Monster Worldwide
+ 0.61% 
National Economy 
Index of Leading Economic Indicators (September)
Source: The Conference Board 
+ 0.33% 

Movement in the USD Index has been erratic in recent months, with the Index alternating advances and declines in each of the last five months.  This is symptomatic of the uncertainty in the economy at this point.  The news has been generally positive.  The local economy is poised to add jobs on an annual basis for the first time in three years, and the local unemployment rate fell below 10 percent after a surge in the summer.  The employment situation is also improving at the national level, and growth in the national economy is accelerating (see below).  But the good news is countered by possible negative developments, including continued weakness in the housing market, international economic concerns, and fiscal problems at all levels of government.  Perhaps the biggest concern is the sharp drop in the perception that people have about the direction of the country as the weak economy takes its toll.  Whether the positives can overcome the negatives is up in the air at this point.

Highlights:  The trend for residential units authorized by building permits was negative for the fourth straight month, but permits remain up for the year as a whole.  Through the end of the third quarter, residential units authorized were up 47 percent in 2011 compared to the same period in 2010.  All of the gain came in multi-family units authorized, which have more than doubled (up 128 percent) compared to last year.  Single-family units authorized were virtually unchanged (1,742 in 2011 vs. 1,744 in 2010). . . There were mixed results in terms of the labor market variables.  After seasonal adjustment, initial claims for unemployment insurance rose slightly, which is a negative for the Index.  On the hiring front, help wanted advertising registered its eighth straight monthly increase.  The net result was that the local unemployment rate fell to 9.7 percent in September from 10.2 percent in August.  With schools back in session, students and non-teacher education employees are no longer seeking work, which eliminated the summer spike that saw the local unemployment rate top 10 percent for the June through August period. . . Consumer confidence rebounded after a steep drop in August caused by the turmoil over the federal debt limit extension and the downgrading of U.S. government debt by Standard & Poor’s. . . Local stock prices continued to be weak as investors were concerned about the direction of the national economy.  The third quarter was a difficult one for local stocks, which ended down more than 18 percent for the quarter. . . The national Index of Leading Economic Indicators rose for the fifth month in a row and the 14th time in 15 months.  The “advance” estimate for GDP growth in the third quarter 2011 showed the national economy growing at a 2.5 percent annualized rate.  While that is not a great number, it was better than the 0.4 percent growth rate of the first quarter and the 1.3 percent rate of the second.

 September’s decrease puts the USD Index of Leading Economic Indicators for San Diego County at 116.1, up from 116.0 in August.  There were no revisions in any of the previously reported data for any of the components.  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 SEP 110.0 +0.0%
  OCT 110.0 +0.0%
NOV 110.2 +0.3%
  DEC 110.7 +0.4%
2011 JAN 111.7 +1.0%
  FEB 114.0 +2.0%
  MAR 115.3 +1.2%
  APR 116.4 +1.0%
  MAY 117.2 +0.7%
  JUN 116.9 -0.2%
  JUL 117.2 +0.2%
  AUG 116.0 -1.0%
  SEP 116.1 +0.1%

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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