The outlook remains unchanged from recent months.  The local economy is expected to be weak for at least the first half of 2009, with job losses in particular expected to mount.  While job losses had previously been confined to real estate-related areas (construction, credit, real estate), the damage is now spreading into other sectors of the local economy.  Retailing has been heavily impacted, with a weak Christmas buying season causing retail employment to fall by 8,500 jobs in December compared to the same month a year ago.  The numbers are expected to worsen with the post-holiday closing of stores such as Mervyn's, Circuit City, and Linens 'n Things.

Highlights: A terrible year for construction ended with residential units authorized by building permits reaching the lowest monthly level on record, dating back to at least 1973.  Total units authorized fell by 31 percent for the year as a whole, with the damage roughly evenly spread in single-family permits (down 33 percent) and multi-family ones (down 29 percent). . . Both sides of the labor market continue under heavy pressure.  Big job losses have led to a surge in initial claims for unemployment insurance (a negative for the Index) at the same time that hiring, as measured by help wanted advertising, is dropping rapidly.  The net result of this is that the local unemployment rate surged above 7 percent in December to 7.4 percent. . . The bad economic news continues to batter local consumer confidence, which has now fallen for 20 months in a row.  Local consumer confidence dropped by 49 percent in 2008 and is down 64 percent from its all-time high reached in October 2004. . . Local stock prices ended the year down more than 38 percent, which was worse than the Dow Jones Industrial Average (down 34 percent) but better than the NASDAQ Composite (down 41 percent). . . Despite a spate of negative news, the national Index of Leading Economic Indicators registered its first increase since April of last year.  Whether this is aberration or a signal of a possible turning point for the national economy remains to be seen, as economists typically look for three consecutive changes in a leading index to signify the latter.

 December's decrease puts the USD Index of Leading Economic Indicators for San Diego County at 108.4, down from October's revised reading of 110.7.  A revision in the national Index of Leading Economic Indicators caused a revision in the value of the USD Index and the previously reported change for October.  Revisions in building permits and local stock prices for November offset one another, but the value of the Index for that month was revised upward from its previously reported value of 110.6.  Please visit the Website address given below to see the revised changes for the individual components.  The values for the USD Index for the last year are given below:

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