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Leading Economic Indicators
Down Slightly in January
March 15, 2007 --
The University of
San Diego's Index of Leading Economic Indicators for San Diego County fell 0.1
percent in January. Help wanted advertising led the move downward with a sharp
drop, and there was also weakness in building permits and initial claims for
unemployment insurance. The biggest news on the upside was a strong increase in
consumer confidence. Local stock prices and the outlook for the national
economy were also up, but only slightly so.
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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 % |
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Building Permits
Residential units authorized by building
permits in San Diego County (January)
Source: Construction Industry Research
Board |
- 0.73% |
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Unemployment Insurance
Initial claims for unemployment insurance
in San Diego County, inverted (January)
Source: Employment Development Department |
- 0.13% |
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Stock Prices
San Diego Stock Exchange Index (January)
Source: San Diego Daily Transcript |
+ 0.22% |
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Consumer Confidence
An index of consumer confidence in San
Diego County (January)
Source: San Diego Union-Tribune |
+ 1.20% |
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Help Wanted Advertising
An index of print and online help wanted advertising in
San Diego (January)
Source: Monster Worldwide, San Diego Union-Tribune |
- 1.57% |
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National Economy
Index of Leading Economic Indicators (January)
Source: The Conference Board |
+ 0.28% |
January's drop was the tenth consecutive monthly
decrease in the USD Index of Leading Economic Indicators. As a result, the
outlook for the local economy remains weak through at least the first half of
2007. The slowdown in the housing market is beginning to have a greater and
greater negative impact, particularly in terms of job losses. Employment in
construction was down 3,800 in January compared to the some month a year
earlier, and real estate-related jobs fell by 2,200. Other parts of the economy
are being impacted as well, e.g., retail employment is down by 2,500 as spending
is reduced by job and income losses. The recent sharp rise in gasoline prices
is likely to make the situation worse, with more buying power being siphoned out
of the local economy.
Highlights:
Residential units authorized by building permits started 2007 the same
way they ended 2006: on the downside. Permits have now declined for ten months
in a row, matching the decline in the overall Index. One final note from the
2006 permit data: single-family units authorized for the year totaled 4,753,
while there were 6,012 multi-family units authorized. This was the first time
since 1990 that the number of multi-family units authorized exceeded the number
of single-family units authorized. . . Both labor market variables continue to
exhibit weakness. Initial claims for unemployment insurance were up for
the tenth month in a row, which is a negative for the Index and a sign that job
losses are edging up slightly. The hiring side of the market was even worse,
with help wanted advertising taking a plunge to open the year. Online
advertising showed big drops in areas of recent strength, including leisure and
hospitality, healthcare, and retailing. As are result, the local unemployment
rate edged up to 4.3 percent from 4.1 percent in January 2006, and job growth
slowed to a gain of slightly more than 13,000 jobs, compared with an average of
nearly 18,000 for 2006 as a whole. . . Despite some relatively bad news, local
consumer confidence continues to surge. That component has now been up
for five months in a row. It will be interesting to see how it might be
affected by the recent rise in gasoline prices, as past data shows a roughly 70
percent negative correlation between consumer confidence and gas prices. . .
Local stock prices started the year up nicely before dropping dramatically
in recent weeks. . . The national Index of Leading Economic Indicators
edged up slightly in January. Preliminary estimates put GDP growth at an anemic
2.2 percent in the fourth quarter, which is actually up from the 2.0 percent
growth registered in the third quarter.
The decrease in January puts the USD Index of
Leading Economic Indicators for San Diego County at 139.8, down from December's
revised reading of 140.0. Revisions in building permits and the national Index
of Leading Economic Indicators affected the previously reported values of the
Index and changes from August 2006 onward, although none of the revisions were
significant. 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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