Leading Indicators Up in November

January 21, 2000 --The University of San Diego's Index of Leading Economic Indicators for San Diego County rose 0.4 percent in November. Leading the move to the upside were sharp advances in local stock prices and consumer confidence. Smaller gains were registered by initial claims for unemployment insurance, help wanted advertising, and the outlook for the national economy. The only negative component was building permits, which were down significantly during the month.

Index of Leading Economic Indicators 
The index for San Diego County that includes the components listed below (November) 
Source: University of San Diego 
+ 0.4 % 
Building Permits 
Residential units authorized by building permits in San Diego County (November) 
Source: Construction Industry Research Board 
- 1.16% 
Unemployment Insurance 
Initial claims for unemployment insurance in San Diego County, inverted (November) 
Source: Employment Development Department 
+ 0.47% 
Stock Prices 
San Diego Stock Exchange Index (November) 
Source: San Diego Daily Transcript 
+ 1.71%
Consumer Confidence 
An index of consumer confidence in San Diego County (November) 
Source: San Diego Union-Tribune
+ 0.98% 
Help Wanted Advertising 
An index of help wanted advertising in the San Diego Union-Tribune (November) 
Source: Greater San Diego Chamber of Commerce 
+ 0.18% 
National Economy 
Index of Leading Economic Indicators (November) 
Source: The Conference Board 
+ 0.46% 

November's gain was the ninth consecutive monthly increase in the Index. The breadth of the advance was the best since June, with five of the six components moving upward. The outlook for the local economy remains the same as in recent months: continued growth for at least the first half of the year 2000.

The one big negative in November's results was the large drop in building permits. This parallels a nationwide trend, as higher interest rates take a toll on the housing industry. On the positive side, local stock prices continue to surge, an indication that the financial markets are encouraged by the prospects for San Diego companies. Continued positive developments in the local economy have improved consumer confidence, which increased significantly for the second month in a row.

Enclosed is the University of San Diego's forecast for various sectors of the local economy for 2000. As can be seen, a gain of more than 17,000 jobs is forecast for the county for the year. While positive, it is below 1999's growth rate, which saw average monthly employment higher by more than 21,000 jobs when compared to 1998. Fueling the growth will be continued strength in the national and international economies, while an anticipated 0.25% to 0.50% increase in interest rates will dampen the pace of that growth.

November's gain puts the Index of Leading Economic Indicators for San Diego County at 146.1, up from October's reading of 145.5. Although the national Index of Leading Economic Indicators was revised upward, there was no revision of the previously reported change of +0.4% in the local Index for the month. The fluctuations of the Index of Leading Economic Indicators for San Diego County for the last year are given below:

    Index  Change 
1998 NOV  141.8 -0.5% 
  DEC 141.1 -0.5% 
1999 JAN 141.5 +0.3% 
  FEB 141.5 +0.0% 
  MAR 141.7 +0.2% 
  APR 141.9 +0.1% 
  MAY 142.6  +0.5% 
  JUN 143.3 +0.5% 
  JUL 143.8 +0.4%
  AUG 144.2 +0.3%
  SEP 145.0 +0.5%
  OCT 145.5 +0.4%
  NOV 146.1 +0.4%

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) 501-2954 

E-mail: agin@home.com 

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.