Leading Indicators Up in October

December 16, 1999--The University of San Diego's Index of Leading Economic Indicators for San Diego County rose 0.4 percent in October. The advance was led strong gains in local stock prices and consumer confidence. Initial claims for unemployment insurance were also moderately positive. Two components–building permits and help wanted advertising–were down slightly, while the outlook for the national economy was unchanged during the month.

	Index of Leading Economic Indicators  The index for San Diego County that includes the components listed below (August)  Source: University of San Diego	+ 0.4 %
	Building Permits  Residential units authorized by building permits in San Diego County (August)  Source: Construction Industry Research Board	- 0.34%
	Unemployment Insurance  Initial claims for unemployment insurance in San Diego County, inverted (August)  Source: Employment Development Department	+ 0.63%
	Stock Prices  San Diego Stock Exchange Index (August)  Source: San Diego Daily Transcript	+ 1.20%
	Consumer Confidence  An index of consumer confidence in San Diego County (August)  Source: San Diego Union-Tribune	+ 1.12%
	Help Wanted Advertising  An index of help wanted advertising in the San Diego Union-Tribune (August)  Source: Greater San Diego Chamber of Commerce	- 0.22%
	National Economy  Index of Leading Economic Indicators (August)  Source: The Conference Board	+ 0.00%

October produced another solid gain for the Index, which has now increased for eight months in a row and has not fallen in 1999. The breadth of the advance was not as strong as in September, with only three of the components advancing. Still, the outlook for the local economy remains positive, at least through the first half of 2000.

Among the individual components, consumer confidence continues its rebound, with its second consecutive gain after falling for a entire year. The magnitude of the increase was the best for that component since 1996. Also encouraging was the performance of initial claims for unemployment insurance. After a slight increase on a seasonally-adjusted basis in September, initial claims for unemployment insurance dropped to the lowest level of the 1990s in October. A total of 11,982 initial claims were filed during the month, the lowest level since December 1989. By comparison, the highest number of claims ever filed in a month was more than 28,000 in January 1992. This offset a small drop in help wanted advertising to produce a second straight month where the County’s unemployment rate was below 3%

This last Leading Indicators report of the 1990s finds the economy of San Diego County in great shape. The unemployment rate is low, income is rising, and the housing market is strong. The forecast for the year 2000 is for continued growth in the local economy, although at a slower pace than in 1999. Please check out next month’s newsletter for a detailed forecast for the various sectors of the local economy. Until then, have a happy holiday season.

October's gain puts the Index of Leading Economic Indicators for San Diego County at 145.5, up from September’s reading of 145.0. Building permits were revised upward in September, but there was no revision of the previously reported change of +0.5% for the month. The fluctuations of the Index of Leading Economic Indicators for San Diego County for the last year are given below:

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The Index of Leading Economic Indicators is published by USD’s Real Estate Institute (REI). For more information about the REI, please contact Mark Riedy at (619) 260-4872.