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Leading Economic Indicators
Down Slightly in April
June 7, 2007 -- The
University of San Diego's Index of Leading Economic Indicators for San Diego
County fell 0.1 percent in April after falling 0.3 percent in February and
rising 0.2 percent in March. Leading the way to the downside in April were big
drops in help wanted advertising and the outlook for the national economy.
Building permits were also down, but to a lesser extent. The big gainer for the
month was local stock prices, while initial claims for unemployment insurance
and consumer confidence were moderately positive.
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Index of Leading Economic
Indicators
The index for San Diego County that
includes the components listed below (April)
Source: University of San Diego |
- 0.1 % |
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Building Permits
Residential units authorized by building
permits in San Diego County (April)
Source: Construction Industry Research
Board |
- 0.49% |
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Unemployment Insurance
Initial claims for unemployment insurance
in San Diego County, inverted (April)
Source: Employment Development Department |
+ 0.46% |
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Stock Prices
San Diego Stock Exchange Index (April)
Source: San Diego Daily Transcript |
+ 1.12% |
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Consumer Confidence
An index of consumer confidence in San
Diego County (April)
Source: San Diego Union-Tribune |
+ 0.52% |
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Help Wanted Advertising
An index of print and online help wanted advertising in
San Diego (April)
Source: Monster Worldwide, San Diego Union-Tribune |
- 0.90% |
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National Economy
Index of Leading Economic Indicators (April)
Source: The Conference Board |
- 0.99% |
April's decline was the twelfth in 13 months for
the USD Index of Leading Economic Indicators. March's increase broke a string
of 11 consecutive monthly decreases for the Index. While still decidedly
negative, the weakness is not universal, as the number of advancing components
continues to match the number of declining ones. The outlook is for continued
weakness in the local economy through the end of 2007 and possibly into the
first part of 2008. That weakness will not likely reach the stage of a
recession, but will manifest itself in slower job growth, higher unemployment,
continued slow home sales, and a general decline in economic activity, including
sales and income growth.
Highlights:
The weak housing market continues to take a toll on construction activity, with
residential units authorized by building permits down about 13 percent in
the first quarter of 2007 compared to the same period in 2006. As was the case
for most of 2006, the slowdown is disproportionately in the permits for
single-family housing, which were off by nearly 26 percent, compared to a 3
percent decline in multi-family permits. . . The labor market variables have
turned mixed. Initial claims for unemployment insurance have fallen for
three straight months, which is a positive for the Index as it means fewer jobs
being lost. However, help wanted advertising has decreased for eight
months in a row. Most of this is due to a big drop in print advertising, as
online advertising actually increased in April. The net result was that the
local unemployment rate edged up to 4.1 percent from 3.7 percent one year ago. .
. Despite gas prices reaching record highs, local consumer confidence
continues to climb. That component has been up in each of the last eight
months. . . After dropping with the rest of the markets in March, local
stock prices followed the advance of those markets to all-time highs April
as investors anticipate the Federal Reserve lowering interest rates. . . The
national economy is weakening rapidly and the forecast is for more of the same,
as the national Index of Leading Economic Indicators has dropped in
three of the last four months. GDP growth in the first quarter came in at a
very slow 0.6 percent. That hurts the San Diego economy in two ways: First,
local firms who do business on a nationwide basis will see slower sales. And
the local tourism industry would be hurt by a slowing national economy as people
cut back their travel plans.
April's decrease puts the USD Index of Leading
Economic Indicators for San Diego County at 139.5, down from March's reading of
139.6. There were revisions in various components for November, December, and
January, some of which affected the previously reported values and changes for
the Index. Please visit the Website address given below to see the revised
changes for the individual components of the Index. The values for the USD
Index for the last year are given below:
For more information on the University of San Diego's Index of Leading
Economic Indicators, please contact:
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