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Leading Economic Indicators
Down Slightly in September
Note:
The tentative release date for next month's report is November 30.
October 28, 2010 -- The
USD Burnham-Moores Center for Real Estate's Index of Leading Economic Indicators
for San Diego County fell 0.1 percent in September. Although four of the six
components were positive during the month, a sharp drop in residential units
authorized by building permits was enough to push the USD Index to its first
decline in a year and a half (since March 2009). Local stock prices, consumer
confidence, help wanted advertising, and the outlook for the national economy
were all positive during the month but only modestly so. It was not enough to
overcome the big decline in building permits and a smaller negative move in
initial claims for unemployment insurance.
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Index of Leading Economic
Indicators
The index for San Diego County that includes the
components listed below (September)
Source: USD Burnham-Moores Center for Real Estate |
- 0.1 % |
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Building Permits
Residential units
authorized by building permits in San Diego County (September)
Source: Construction Industry Research
Board |
- 1.52% |
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Unemployment Insurance
Initial claims for unemployment insurance in San Diego County, inverted
(September)
Source: Employment Development Department |
- 0.39% |
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Stock Prices
San Diego Stock Exchange Index (September)
Source:
San Diego Daily Transcript |
+ 0.52% |
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Consumer Confidence
An index of consumer confidence in San
Diego County (September)
Source:
San Diego Union-Tribune |
+ 0.23% |
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Help Wanted Advertising
An index of online help wanted advertising in
San Diego (September)
Source: Monster Worldwide |
+ 0.15% |
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National Economy
Index of Leading Economic Indicators (September)
Source: The Conference Board |
+ 0.53% |
While September’s decline is a little
worrisome, it is not a signal that a downturn in the local economy is imminent.
The drop was small, and economists usually look for three consecutive moves in a
leading index in the same direction to signal a turning point in an economy.
Further evidence is needed to determine whether this was an aberration or the
start of a negative trend. One positive sign is that a majority of the
components in the Index were up during the month; the problem was that they
weren’t up by very much. This may be an indication that any growth in the local
economy may have slowed to the point where it has stalled. It remains to be seen
whether that stall is just a temporary bump in an upward trend or the start of
the dreaded "double dip" recession.
Highlights:
Residential units authorized by building permits fell significantly as a
slowing housing market caused developers to be more cautious. Despite the
slowdown, residential unit authorized were up nearly 17 percent through the end
of the third quarter compared to the same period in 2009. All of the gain was
due to an increase in single-family units authorized, which were up almost 32
percent, while multi-family units actually fell by roughly 2 percent compared to
2009 . . . The labor market components continue to move in opposite directions.
Job losses remain high, as initial claims for unemployment insurance were
negative for the sixth straight month. Help wanted advertising was up for
the 11th consecutive month, but may have plateaued as the rate of
increase has slowed considerably. The net result was that the local unemployment
rate remained at 10.6 percent in September, unchanged from the same level in
August. . . Despite rising for the fifth month in a row, local consumer
confidence remains down more the seven percent compared to a year ago and
down almost 40 percent from the all-time high. As has been indicated previously,
it will take a strong rebound in the job market to get confidence rising sharply
again. . . Local stock prices advanced again as the financial markets
bounced back from a summer slump. Local stocks finished the third quarter up 5.4
percent since the beginning of the year. . . The national Index of Leading
Economic Indicators continues to signal growth in the national economy,
although the pace is likely to be weak. The "third" estimate for Gross Domestic
Product (GDP) for the second quarter showed that growth was revised upward but
still remains slow at a 1.7 percent annualized rate.
September’s decrease puts the USD Index of Leading Economic
Indicators for San Diego County at 109.9, down from August’s level of 110.0.
Although the national Index of Leading Economic Indicators was revised for June
through August, there was no change to the previously reported values for the
USD Index or the changes for those months. 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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