Leading Indicators Unchanged in February

April 15, 1999--The University of San Diego's Index of Leading Economic Indicators for San Diego County was unchanged during February. There were small to moderate gains in four of the components: building permits, initial claims for unemployment insurance, local stock prices, and the outlook for the national economy. However, these were all offset by a sharp decline in help wanted advertising. Consumer confidence was virtually unchanged, although with a slight negative bias.

Index of Leading Economic Indicators 
The index for San Diego County that includes the components listed below (February) 
Source: University of San Diego 
+ 0.0 % 
Building Permits 
Residential units authorized by building permits in San Diego County (February) 
Source: Construction Industry Research Board 
+ 0.30% 
Unemployment Insurance 
Initial claims for unemployment insurance in San Diego County, inverted (February) 
Source: Employment Development Department 
+ 0.77% 
Stock Prices 
San Diego Stock Exchange Index (February) 
Source: San Diego Daily Transcript 
+ 0.50%
Consumer Confidence 
An index of consumer confidence in San Diego County (February) 
Source: San Diego Union-Tribune
- 0.05% 
Help Wanted Advertising 
An index of help wanted advertising in the San Diego Union-Tribune (February) 
Source: Greater San Diego Chamber of Commerce 
- 2.10% 
National Economy 
Index of Leading Economic Indicators (February) 
Source: The Conference Board 
+ 0.31% 

February’s unchanged reading for the Index paints a mixed picture as far as the local eocnomy is concerned. On the positive side, a majority of the components of the Index were higher, which indicates some firming in many aspects of the economy. On the other hand, the gains were not impressive, and were matched by the sharp decline of just a single component. Therefore, as has been the case in recent months, the Index continues to signal a slowdown for San Diego's economy later on this year.

The Index continues to be adversely affected by a big drop off in help wanted advertising. Help wanted advertising in February was down more than 30% when comparedto the same month in 1998. Some people have speculated that this might be due to the increased use of the Internet by employers and job seekers alike. However, a national poll by the William Olsten Center for Workforce Strategies in Melville, N.Y., indicates that 43% of all hires are found through help wanted classified ads (San Diego Union-Tribune, 15 March 1999, p. C-1). This is far ahead of the next highest sources (employee referrals at 13% and recruiting firms at 12%), and still farther ahead of the Internet (5%). The proportion for the Internet may be higher in technologically advanced San Diego, but help wanted advertising is still an important aspect of the labor market, and its decline is a cause for concern.

Balancing the negative news regarding help wanted advertising is continuing improvements for initial claims for unemployment insurance. They fell below the 15,000 mark in February, which is typically the third highest month of the year for initial claims. Thus, there is no sign of job loss at all at this time.

February's unchanged reading puts the Index of Leading Economic Indicators for San Diego County at 141.4, the same as January's value. There were no revisions to any of the components. The fluctuations of the Index of Leading Economic Indicators for San Diego County for the last year are given below:

    Index  Change     
1998 FEB   142.6  +0.4%   
  MAR 142.8 +0.1%   
  APR 142.9 +0.1%   
  MAY  143.1  +0.1%   
  JUN  143.2  +0.1%   
  JUL  143.5  +0.2%   
  AUG  143.8  +0.7%   
  SEP 143.2 -0.4%   
  OCT 142.4 -0.5%   
  NOV  141.7 -0.5%   
  DEC 141.0 -0.5%   
1999 JAN  141.4 +0.3%   
  FEB 141.4 +0.0%   

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: (619) 260-4883 

FAX: (619) 260-4891 

E-mail: AGin@prodigy.net 

The Index of Leading Economic Indicators is published by USD’s Real Estate Institute (REI). For more information about the REI, please contact Mark Riedy at (619) 260-4872.