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Leading Economic Indicators
Up Slightly in September
Note:
The tentative release date for the 20th anniversary edition of the
Leading Economic Indicators is October 25.
October 28, 2011 --
The USD Burnham-Moores Center for Real Estate’s Index of Leading Economic
Indicators for San Diego County
rose 0.1 percent in September. The month
was uneventful, with none of the six components changing significantly.
Moderate gains in consumer confidence, help wanted advertising, and the
outlook for the national economy outweighed smaller declines in building
permits, initial claims for unemployment insurance, and local stock prices to
push the USD Index to a modest gain after a sharp decline in August.
Movement in the USD Index has been erratic in recent months,
with the Index alternating advances and declines in each of the last five
months. This is symptomatic of the
uncertainty in the economy at this point.
The news has been generally positive.
The local economy is poised to add jobs on an annual basis for the first
time in three years, and the local unemployment rate fell below 10 percent after
a surge in the summer. The
employment situation is also improving at the national level, and growth in the
national economy is accelerating (see below).
But the good news is countered by possible negative developments,
including continued weakness in the housing market, international economic
concerns, and fiscal problems at all levels of government.
Perhaps the biggest concern is the sharp drop in the perception that
people have about the direction of the country as the weak economy takes its
toll. Whether the positives can
overcome the negatives is up in the air at this point.
Highlights:
The trend for
residential units authorized by building permits
was negative for the fourth straight month, but permits remain up for the year
as a whole. Through the end of the
third quarter, residential units authorized were up 47 percent in 2011 compared
to the same period in 2010. All of
the gain came in multi-family units authorized, which have more than doubled (up
128 percent) compared to last year.
Single-family units authorized were virtually unchanged (1,742 in 2011 vs. 1,744
in 2010). . . There were mixed results in terms of the labor market variables.
After seasonal adjustment, initial claims
for unemployment insurance rose slightly, which is
a negative for the Index. On the
hiring front, help wanted advertising registered its eighth straight
monthly increase. The net result
was that the local unemployment rate fell to 9.7 percent in September from 10.2
percent in August. With schools
back in session, students and non-teacher education employees are no longer
seeking work, which eliminated the summer spike that saw the local unemployment
rate top 10 percent for the June through August period. . . Consumer
confidence rebounded after a steep drop in August caused by the turmoil over
the federal debt limit extension and the downgrading of U.S. government debt by Standard &
Poor’s. . . Local stock prices continued to be weak as investors were
concerned about the direction of the national economy.
The third quarter was a difficult one for local stocks, which ended down
more than 18 percent for the quarter. . . The national Index of Leading
Economic Indicators rose for the fifth month in a row and the 14th
time in 15 months. The “advance”
estimate for GDP growth in the third quarter 2011 showed the national economy
growing at a 2.5 percent annualized rate.
While that is not a great number, it was better than the 0.4 percent
growth rate of the first quarter and the 1.3 percent rate of the second.
September’s decrease puts the USD Index of
Leading Economic Indicators for San Diego County
at 116.1, up from 116.0 in August.
There were no revisions in any of the previously reported data for any of the
components. 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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