Leading Indicators Down in April

	Index of Leading Economic Indicators  The index for San Diego County that includes the components listed below (April)  Source: University of San Diego	- 0.3 %
	Building Permits  Residential units authorized by building permits in San Diego County (April)  Source: Construction Industry Research Board	+ 0.80%
	Unemployment Insurance  Initial claims for unemployment insurance in San Diego County, inverted (April)  Source: Employment Development Department	- 0.42%
	Stock Prices  San Diego Stock Exchange Index (April)  Source: San Diego Daily Transcript	+ 0.77%
	Consumer Confidence  An index of consumer confidence in San Diego County (April)  Source: San Diego Union-Tribune	- 2.17%
	Help Wanted Advertising  An index of help wanted advertising in the San Diego Union-Tribune (April)  Source: San Diego Union-Tribune	- 1.05%
	National Economy  Index of Leading Economic Indicators (April)  Source: The Conference Board	+ 0.17%

After falling sharply during the summer and fall of 2002, the USD Index of Leading Economic Indicators appears to be leveling out, even though the trend remains negative.  The number of increasing vs. decreasing components remains even, as has been the case in recent months.  The outlook then for the local economy remains relatively flat, and I=m lowering my forecast for employment growth in San Diego County to the 7,000 to 10,000 range from 10,000 to 15,000.  Although still positive, this would be the lowest job growth number since 1994.  Problems with the state budget and a sluggish national job market are the main causes for concern about the health of the local economy in the near future.

Highlights: Residential units authorized by building permits continue to be issued at a healthy pace.  While single-family units authorized were virtually unchanged compared to the same period in 2002, multifamily units authorized were up over 60%. . . The labor market outlook remains weak, with both labor market variables negative for the month.  After falling sharply for four consecutive months (a positive for the Index),  initial claims for unemployment insurance increased in April.  The increase in the pace of job loss was likely due to the adverse impact on the local economy of the deployment of troops to Iraq .  Combined with another decline in help wanted advertising,  total wage and salary employment in San Diego County fell in April compared to the year before, the first year-to-year decline in employment since July 1993.  Despite that, the county=s unemployment rate edged downward to 4.2% in April, compared to 4.4% in March. . . Local stock prices advanced in April as the quick end to the Iraq conflict produced increased optimism in the financial markets. . . The trend in local consumer confidence continues to be the most negative influence on the Index.  Consumer confidence is down nearly 35% from the short-term top set exactly one year ago.  Weak consumer spending caused by a lack of confidence is slowing the economy at the national level, and the same may be happening to the local economy.  It remains to be seen whether the recently passed tax reduction and intergovernmental aid package will stimulate either consumer confidence or spending. . . The outlook for the national economy turned up in April, with the national Index of Leading Economic Indicators edging up slightly.  Although recent national data has been positive, it has not yet been reflected in job growth, which will be the key to sustaining growth both nationally and locally.

April=s decrease puts the Index of Leading Economic Indicators for San Diego County at 130.9, down from March=s reading of 131.3.  An upward revision in building permits caused the previously reported change of -0.2% to be revised upward to -0.1%.  The values for the Index of Leading Economic Indicators for San Diego County for the last year are given below:

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