Leading Indicators Up in September

November 11, 1999--The University of San Diego's Index of Leading Economic Indicators for San Diego County rose 0.5 percent in September. The advance was fueled by a big gain in local stock prices and supported by moderate increases in building permits, consumer confidence, and help wanted advertising. Two components–initial claims for unemployment insurance and the outlook for the national economy–experienced minor losses during the month.

Index of Leading Economic Indicators 
The index for San Diego County that includes the components listed below (September) 
Source: University of San Diego 
+ 0.5 % 
Building Permits 
Residential units authorized by building permits in San Diego County (September) 
Source: Construction Industry Research Board 
+ 0.61% 
Unemployment Insurance 
Initial claims for unemployment insurance in San Diego County, inverted (September) 
Source: Employment Development Department 
- 0.14% 
Stock Prices 
San Diego Stock Exchange Index (September) 
Source: San Diego Daily Transcript 
+ 1.34%
Consumer Confidence 
An index of consumer confidence in San Diego County (September) 
Source: San Diego Union-Tribune
+ 0.79% 
Help Wanted Advertising 
An index of help wanted advertising in the San Diego Union-Tribune (September) 
Source: Greater San Diego Chamber of Commerce 
+ 0.74% 
National Economy 
Index of Leading Economic Indicators (September) 
Source: The Conference Board 
- 0.15% 

September’s rise was the seventh consecutive monthly increase for the Index. The advance was the best of the year in terms its breadth, with solid gains in four of the components and only small losses in the other two. Thus, the outlook for the local economy remains positive in the near term, as has been the case for the last few months.

One key development in September was the increase in consumer confidence, which had declined for 12 months in a row. Last month’s report discussed the importance of consumer spending for the local economy. Breaking a streak in the opposite direction was a slight increase in initial claims for unemployment insurance (a negative for the Index), the first in nine months. Offsetting this on the other side of the labor market was another good gain in help wanted advertising, its third in the last four months.

Also important was the increase in residential units authorized by building permits. September is usually a poor month for building permits, but a large 736-unit apartment project boosted the month’s total to one of best of the year. That project has contributed to an outstanding year for multiple-family units authorized, which are running at double last year’s pace. The projected total for multiple-family units authorized for the year now tops 6,000, which would be more than the total (single- and multiple-family) number of residential units authorized in the years 1992 and 1993.

September's gain puts the Index of Leading Economic Indicators for San Diego County at 145.0, up from August’s reading of 144.2. Building permits and the national Index of Leading Economic Indicators were revised upward in August, but there was no revision of the previously reported change of +0.3% 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 SEP 143.2  -0.4%
  OCT 142.5 -0.5% 
  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%

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.