Leading Indicators Up Slightly in January

	Index of Leading Economic Indicators  The index for San Diego County that includes the components listed below (January)  Source: University of San Diego	+ 0.1 %
	Building Permits  Residential units authorized by building permits in San Diego County (January)  Source: Construction Industry Research Board	+ 1.78%
	Unemployment Insurance  Initial claims for unemployment insurance in San Diego County, inverted (January)  Source: Employment Development Department	+ 0.68%
	Stock Prices  San Diego Stock Exchange Index (January)  Source: San Diego Daily Transcript	- 1.76%
	Consumer Confidence  An index of consumer confidence in San Diego County (January)  Source: San Diego Union-Tribune	- 1.43%
	Help Wanted Advertising  An index of help wanted advertising in the San Diego Union-Tribune (January)  Source: Greater San Diego Chamber of Commerce	- 0.37%
	National Economy  Index of Leading Economic Indicators (January)  Source: The Conference Board	+ 1.48%

January’s increase in the USD Index of Leading Economic Indicators broke a string of six consecutive monthly decreases in the Index. The month was one of the more volatile ones in the Index’s history, with big moves in four of the six components. Despite the volatility, the Index was very evenly divided in terms of its positive and negative components. As a result, it is not possible to say that this is the start of a new, upward trend in the Index in contrast to the decline that occurred over the last half year. The forecast remains for a slowing of the local economy with some rough spots later in the year. However, San Diego’s economy is likely to do better than the national economy, where a recession is being forecasted in some quarters. That’s because San Diego does not have a large concentration of "smokestack" industries that would be hard hit in a traditional economic downturn. Also, the fact that many of the firms located in San Diego are small to medium sized is a benefit, as those companies will be more flexible in dealing with a downturn than larger-sized companies.

Highlights: The number of residential units authorized by building permits totaled 1,879 in January, an increase of nearly 60% from the year before. On a seasonally adjusted basis, January’s number of residential units authorized is the highest since January 1999. . . Initial claims for unemployment insurance typically surge in January as some firms reduce staffing after the Christmas buying season. After adjusting for the seasonality, initial claims dropped for the fifth month in a row, and remain at low levels not seen in over a decade. . . Local stock prices dropped for the eighth consecutive month in January. . . After a very small gain in December, consumer confidence plunged in January, an indication the December’s gain was an aberration and not an end to the downward trend in that component, which began in March of last year. . . The national Index of Leading Economic Indicators had its largest gain in nearly five years in January. This ended a stretch of three straight down months for the national Index, and was the first increase since March of last year.

January's decrease puts the Index of Leading Economic Indicators for San Diego County at 147.0 up from December’s revised reading of 146.9. The December value for the Index was revised downward from the previously reported value of 147.0 due to downward revisions in building permits and the national Index of Leading Economic Indicators. The previously reported change of -0.3% for the month was revised downward to -0.4%. The fluctuations of the Index of Leading Economic Indicators for San Diego County for the last year are given below:

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