Leading Indicators Up in December

	Index of Leading Economic Indicators  The index for San Diego County that includes the components listed below (December)  Source: University of San Diego	+ 0.4 %
	Building Permits  Residential units authorized by building permits in San Diego County (December)  Source: Construction Industry Research Board	- 0.19%
	Unemployment Insurance  Initial claims for unemployment insurance in San Diego County, inverted (December)  Source: Employment Development Department	+ 0.86%
	Stock Prices  San Diego Stock Exchange Index (December)  Source: San Diego Daily Transcript	+ 0.52%
	Consumer Confidence  An index of consumer confidence in San Diego County (December)  Source: San Diego Union-Tribune	+ 1.13%
	Help Wanted Advertising  An index of help wanted advertising in the San Diego Union-Tribune (December)  Source: Greater San Diego Chamber of Commerce	- 2.19%
	National Economy  Index of Leading Economic Indicators (December)  Source: The Conference Board	+ 2.11%

December’s increase breaks a string of ten consecutive decreases in the USD Index of Leading Economic Indicators. For the first time since April 2000, more components were up (four) than down (two). While it remains to be seen whether the positive momentum can be sustained, the increase is a positive development. It supports the previously expressed view of a pick up in the local economy in the second half of 2002 after a slowing in the first half. A rebound in the national economy and increased spending on military goods will be among the factors contributing to the second half surge.

Highlights: Residential units authorized by building permits edged lower in December, but finished 2001 down less than 2% from 2000 levels. Although multi-family units authorized fell more than 6%, single family units authorized were up for the year. . . The labor market components showed mixed results. Initial claims for unemployment insurance fell (a positive for the Index) for the first time since February, signaling a slowing in job losses that surged in the wake of the September 11 attacks. On the other side of the labor market, hiring plans as measured by help wanted advertising remained weak, with that component falling for the tenth straight month and reaching the lowest absolute level since February 1983. The combination resulted in an unemployment rate of 3.3% for December, a low rate which reflects increased employment during the holiday season. . . Local stock prices increased for the third consecutive month and are now above their levels on September 11. Prices ended 2001 at levels not seen since July . . . Consumer confidence continued a strong upward trend after a brief interruption in November. The successful prosecution of the war in Afghanistan and relatively good local economic news likely contributed to this result. . . The national Index of Leading Economic Indicators had its largest monthly increase since February 1996 and registered its third consecutive gain. Many economists are forecasting a relatively short recession in the national economy with recovery occurring early in 2002. It’s possible that the recovery has already begun, with the Gross Domestic product increasing at a 0.2% annualized growth rate in the fourth quarter of 2001,

December's decrease puts the Index of Leading Economic Indicators for San Diego County at 137.3, up from November’s revised reading of 136.8. A revision in the national Index of Leading Economic Indicators for November led to the change in that component being revised from +0.82 to +1.47. The change for the overall Index for November was revised upward to -0.4% from the previously reported change of -0.5%. The values for the Index of Leading Economic Indicators for San Diego County for the last year are given below:

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