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Leading Economic Indicators
Up Slightly in July
Note:
The
tentative release date for next month's report is September 29.
August 27, 2009 -- The University of
San Diego's Index of Leading Economic Indicators for San Diego County rose 0.1
percent in July. A strong gain in local consumer confidence, a lesser but still
significant one in the outlook for the national economy, and a small increase in
local stock prices was enough to push the Index to its fourth consecutive gain.
On the downside, initial claims for unemployment insurance hit record levels,
help wanted advertising remains down significantly, and building permits turned
slightly negative.
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Index of Leading Economic
Indicators
The index for San Diego County that
includes the components listed below (July)
Source: University of San Diego |
+ 0.1 % |
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Building Permits
Residential units authorized by building
permits in San Diego County (July)
Source: Construction Industry Research
Board |
- 0.18% |
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Unemployment Insurance
Initial claims for unemployment insurance in San Diego
County, inverted, estimated (July)
Source: Employment Development Department |
- 2.59% |
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Stock Prices
San Diego Stock Exchange Index (July)
Source: San Diego Daily Transcript |
+ 0.12% |
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Consumer Confidence
An index of consumer confidence in San
Diego County (July)
Source: San Diego Union-Tribune |
+ 2.99% |
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Help Wanted Advertising
An index of online help wanted advertising in
San Diego (July)
Source: Monster Worldwide |
- 1.15% |
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National Economy
Index of Leading Economic Indicators (July)
Source: The Conference Board |
+1.18% |
The outlook for San Diego's economy
remains cautiously optimistic. As has been mentioned previously, the bottom is
projected to be reached in the first half o 2010. Some economic variables are
likely to turn up before then, but job losses are expected to continue for the
rest of this year. 2009 is shaping up to be the worst year ever for San Diego
County in terms of net employment loss, with the job loss for July compared to
July 2008 topping 55,000. The hardest hit sectors include construction (down
10,400 jobs), leisure and hospitality (-9,300), administrative, support, and
waste services (-9,200), retail trade (-8,000), and manufacturing (-7,700). The
only positive sector for job growth was in healthcare, but only 800 jobs were
created in that industry in the last year. Employment will be among the last
economic indicators to rebound as employers have squeezed productivity gains out
of their workers and will be reluctant to expand their workforces unless they
are absolutely certain that a recovery has taken hold.
Highlights: A modest rebound in residential units authorized by
building permits came to an end as that component fell for the first time in
four months. Only 177 residential units were authorized in July, which was the
third worst total ever, topped only be the abysmal numbers in January and
February of this year. . . Both labor market variables remain under pressure.
Initial claims for unemployment insurance hit a new all-time high,
topping the 38,000 mark in July. Hiring remains at depressed levels, although
the decline in help wanted advertising was the smallest since September
2008. The net result was that the local unemployment rate increased to 10.3
percent in July. . . The trend in local consumer confidence continues to
be positive compared to the end of 2008 and the beginning of this year. The key
to a rebound is whether and when this increased confidence translates into
greater consumer spending and housing sales. . . Local stock prices
advanced for the fourth month in a row, although the gain was relatively small
compared to recent months. . . The national Index of Leading Economic
Indicators also rose for the fourth consecutive month. While the Gross
Domestic Product (GDP) fell in the second quarter of 2009, the annualized change
of -1.0 percent was much lower than the 5.4 percent and 6.4 percent drops in the
fourth quarter of 2008 and the first quarter of this year respectively. Look
for GDP growth to turn positive in the third quarter.
July's
decrease puts the USD Index of Leading Economic Indicators for San Diego County
at 101.7, up from June's reading of 101.6. There were revisions to the national
Index of Leading Economic Indicators for April and May, but they did not affect
the percentage change or the previously reported level of the USD Index. 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:
For more information on the University of San Diego's Index of Leading
Economic Indicators, please contact:
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