Home

Leading Economic Indicators Up Sharply in September

Note: The tentative release date for next month's report is December 1.

October 27, 2009 -- The University of San Diego's Index of Leading Economic Indicators for San Diego County rose 1.0 percent in September.  For the sixth month in a row, a strong rise in local consumer confidence led the move to the upside.  Building permits and the outlook for the national economy were also up sharply during the month.  On the downside, initial claims for unemployment insurance were significantly negative, and there were smaller decreases in local stock prices and help wanted advertising.  

	Index of Leading Economic Indicators  The index for San Diego County that includes the components listed below (September)  Source: University of San Diego	+ 1.0 %
	Building Permits  Residential units authorized by building permits in San Diego County (September)  Source: Construction Industry Research Board	+1.37%
	Unemployment Insurance  Initial claims for unemployment insurance in San Diego County, inverted, estimated  (September)  Source: Employment Development Department	- 1.66%
	Stock Prices  San Diego Stock Exchange Index (September)  Source: San Diego Daily Transcript	-0.53%
	Consumer Confidence  An index of consumer confidence in San Diego County (September)  Source: San Diego Union-Tribune	+ 4.95%
	Help Wanted Advertising  An index of online help wanted advertising in San Diego (September)  Source: Monster Worldwide	- 0.28%
	National Economy  Index of Leading Economic Indicators (September)  Source: The Conference Board	+1.93%

September's gain was the sixth straight monthly increase in the USD Index and its strongest increase since it turned positive in April.  The outlook continues to be for the local economy to remain weak for the rest of 2009 but to hit a bottom in the first half of 2010.  This is in terms of jobs and employment, which typically is a lagging indicator.  Economic activity may already be picking up, but businesses tend to be cautious in terms of hiring new workers until they are sure that a recovery has taken hold.  As a result, the local unemployment rate is expected to approach and may top the 11 percent mark before improving.

 Highlights: Residential units authorized by building permits bounced back in September after a couple of weak months.  Still, residential units authorized are down 48 percent through the third quarter of 2009 compared to the same period in 2008.  While single-family units authorized were down 34 percent, multi-family units authorized were down a whopping 59 percent through the end of the third quarter. . . For the 18^th consecutive month, both labor market variables were negative.  Seasonally adjusted initial claims for unemployment insurance reached an all-time high in September, which is usually the lowest month of the year for initial claims.  On the other hand, help wanted advertising, while still negative, seems to have stabilized somewhat.  The net result was that the local unemployment rate remains high at 10.2 percent in September, although that was down from a revised 10.6 percent in August. . . The trend in local consumer confidence remains strong, with the current level well above the lows set in the first quarter of this year.  According to the San Diego Union-Tribune, that holds for both the outlook for the current situation and for future expectations. . .  Local stock prices went counter to the rest of the markets and were down in September.  Despite that, local stocks are up nearly 49 percent since the beginning of the year. . . Matching the local index, the national Index of Leading Economic Indicators has now also increased for six consecutive months.  While GDP growth is likely to be positive in the third quarter, unemployment remains a problem, with job losses continuing and the national unemployment rate likely to top 10 percent (from the current 9.8 percent).

 September's decrease puts the USD Index of Leading Economic Indicators for San Diego County at 103.4, up from August's revised reading of 102.5.  Revisions in building permits for August and in the national Index of Leading Economic Indicators for June through August affected the change in the USD Index for June and August and its level for July and August.  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: