There is no change in the previously reported negative outlook for the local economy through the first half of 2009.  What is needed to turn the economy around both locally and nationally is stability in the housing market.  Falling prices and a jump in foreclosures have hurt both the labor market and the financial markets and institutions.  The recent increase in home resales is a positive sign, but a bottom in the housing market in not likely to be reached until the latter part of 2009, and home prices are not expected to increase until 2010 at the earliest. 

Highlights: A weak September broke a four month positive streak for residential units authorized by building permits.  Total residential units authorized were down 24 percent through the first three quarters of 2008 compared to the same period in 2007.  The large inventory of single family homes on the market led to a drop of nearly 34 percent in single-family units authorized, compared to a 14 percent drop in multi-family units. . . Both the labor market variables remain negative.  The pace of job loss is accelerating, as initial claims for unemployment insurance reached a five year high.  On the hiring side, help wanted advertising fell for the 25^th month in a row.  The net result was that the local unemployment rate remained above the 6 percent level for the third consecutive month at 6.4 percent. . . For the first time in 11 months, local consumer confidence was not the biggest negative component.  Local consumer confidence is still negative, but may be approaching a bottom.  It remains to be seen how this will be impacted by the negative news in the financial markets. . . Local stock prices fell in September in a prelude to the disastrous results to come in October. . . The news on the national economy remains negative despite the rise in the national Index of Leading Economic Indicators.  September saw a loss of 159,000 jobs nationwide, the worst result since March 2003.  Also, the previously reported growth rate of Gross Domestic Product (GDP) for the second quarter was revised downward from 3.3 percent to 2.8 percent.  There is a strong possibility that growth in the third quarter will be negative, given the job losses and the turmoil in the financial markets, with a weak fourth quarter to follow.  It is very likely that a recession will be declared for the national economy; in fact, we may be there already.

September’s decrease puts the USD Index of Leading Economic Indicators for San Diego County at 115.4, down from August’s revised reading of 116.3.  Revised data for building permits and the national Index of Leading Economic Indicators led to the previously reported change of -0.6 percent to be revised downward to -0.8 percent.  Also revised was the Index value and change for June. 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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