Leading Economic Indicators Up in March

Note: After supplying building permit data on a regular basis for the USD Index for nearly 20 years, changes at the Construction Industry Research Board (CIRB) have led to delays in the reporting of building permit data and the release of the monthly report.  Data has now been released for February and March and the California Homebuilding Foundation (CHF) is in the process of taking over the CIRB functions.  The CHF plans to begin releasing data this summer but has not announced an exact date so the date of the next Leading Economic Indicators Index is uncertain.  My thanks to Ben Bartolotto of the Construction Industry Research Board for all his help over the years.

May 31, 2012 -- The USD Burnham-Moores Center for Real Estate’s Index of Leading Economic Indicators for San Diego County rose 0.9 percent in both February and March.  For March, five of the six components were up, with particularly large gains in initial claims for unemployment insurance and consumer confidence.  There were smaller increases in building permits, help wanted advertising, and the outlook for the national economy.  The only component not advancing was local stock prices, and they were unchanged.      

Index of Leading Economic Indicators 
The index for San Diego County that includes the components listed below (March
Source: USD
 Burnham-Moores Center for Real Estate
+ 0.9 % 
Building Permits 
Residential units authorized by building permits in San Diego County (March)
Source: Construction Industry Research Board
+ 0.59% 
Unemployment Insurance 
Initial claims for unemployment insurance in San Diego County, inverted (March

Source: Employment Development Department 
+ 1.98% 
Stock Prices 
San Diego Stock Exchange Index (March) 
Source: San Diego Daily Transcript 
+ 0.00%
Consumer Confidence 
An index of consumer confidence in San Diego County, estimated  (March)
Source: The Conference Board
+ 2.19% 

Help Wanted Advertising 
An index of online help wanted advertising in San Diego (March) 
Source: Monster Worldwide
+ 0.20% 
National Economy 
Index of Leading Economic Indicators (March)
Source: The Conference Board 
+ 0.61% 

With the two positive months, the USD Index had advanced for five consecutive months through March.  Also positive was a pickup in the strength and breadth of the advance, with many components up and up significantly.  This suggests continued growth in the local economy through the end of 2012, with the pace picking up towards the end of the year.

Highlights:  Residential units authorized by building permits started the year negatively, with total units authorized for the first quarter down almost 23 percent compared to the first quarter of 2011.  Single-family units authorized were particularly hard hit:  they fell by 28 percent in the first quarter, compared to a loss of 20 percent for multi-family units authorized. . . Both labor market variables continue to be positive.  Initial claims for unemployment insurance have fallen for seven months in a row, which is a positive for the Index.  The programs extending the duration of unemployment insurance have never been included in the calculation of this component, so legislation cutting back on those benefits have no impact here.  On the hiring front, help wanted advertising has increased for 16 consecutive months.  The net result was that the local unemployment rate fell below 9 percent again to 8.7 percent in April, which is the lowest unemployment rate since February 2009.  This compares to an unemployment rate of 9.6 percent in March and 9.7 percent in April 2011. . . Consumer confidence continues to improve, even though gas prices surged in the two months covered by this report.  In the past, there has been a significant correlation between increases in gas prices and a fall in consumer confidence. . . Even though local stock prices were flat in March, the first quarter was a good one for local stocks, which were up 14.9 percent.  This compares to gains of 8.1 percent in the Down Jones Industrial Average, 12.0 percent in the S&P 500 Index, and 18.7 percent in the NASDAQ Composite Index. . . Despite sluggish growth for the national economy, the outlook remains positive, with the national Index of Leading Economic Indicators having advanced for 11 months in a row.  The “advance” estimate for Gross Domestic Product growth for the first quarter was 2.2 percent, down from 3.0 percent in the fourth quarter  but above the 1.7 percent growth rate for 2011 as a whole. 

March’s increase puts the USD Index of Leading Economic Indicators for San Diego County at 119.8, up from 118.7 in February.  For revisions to the previously reported values for the Index, for the monthly change, and for changes for the individual components, please visit the Website address given below.  The values for the USD Index for the last year are given below:


% Change
2011 MAR 115.3 +1.2%
  APR 116.4 +1.0%
  MAY 117.2 +0.7%
  JUN 116.9 -0.2%
  JUL 117.1 +0.2%
  AUG 116.0 -1.0%
  SEP 116.1 +0.1%
  OCT 115.9 -0.2%
  NOV 116.2 +0.2%
  DEC 116.9 +0.6%
2012 JAN 117.7 +0.7%
  FEB 118.7 +0.9%
  MAR 119.8 +0.9%

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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
Twitter: @alanginusdsba