Note: The tentative release date of next month’s report is June 30.
The USD Burnham-Moores Center for Real Estate’s Index of Leading Economic Indicators for San Diego County rose 0.9 percent in April. Once again, all six components were positive. Building permits led the move, followed by strong gains in help wanted advertising and the outlook for the national economy. There were smaller increases in initial claims for unemployment insurance, consumer confidence, and local stock prices.
With April’s increase, the USD Index has now increased for 11 months in a row. This would have been the fourth consecutive month where all six components of the Index were up, but a revision of the national Index of Leading economy indicators for February pushed that component into the negative column. This was also the first month in 2015 where the gain was less than the significant one percent level, although it was very close. The outlook continues to be for strong growth in the local economy for the rest of 2015 and at least through the early part of 2016. Recent employment reports have put the year-over-year increase in wage and salary employment at over 40,000, which would be the best annual gain since 2000. The strongest sectors of the economy at this point are professional, scientific, and technical services (+8,200 jobs year-over-year), leisure and hospitality (+6,500), and health care (+4,900). The first is particularly important for San Diego because it includes research and development jobs in science and technology that are high paying and important to the local economy.
|Index of Leading Economic Indicators The index for San Diego County that includes the components listed below (April)Source: USD Burnham-Moores Center for Real Estate||+0.9%|
|Building Permits Residential units authorized by building permits in San Diego County (April)Source: U.S. Census Bureau||+1.89%|
|Unemployment Insurance Initial claims for unemployment insurance in San Diego County, inverted (April)Source: Employment Development Department||+0.65%|
|Stock Prices San Diego Stock Exchange Index (April)Source: San Diego Daily Transcript||+0.14%|
|Consumer Confidence An index of consumer confidence in San Diego County, estimated (April)Source: The Conference Board||+0.25%|
|Help Wanted Advertising An index of online help wanted advertising in San Diego (April)Source: The Conference Board||+1.04%|
|National Economy Index of Leading Economic Indicators (April)Source: The Conference Board||+1.29%|
Highlights: A huge surge in multi-family units pushed residential units authorized by building permits to its highest level since March of last year. A total of 991 units were authorized in April, of which 719 were multi-family units. . . The labor market variables remain strong, although both initial claims for unemployment insurance and help wanted advertising were less positive than they have been in recent months. The net result was that the seasonally adjusted local unemployment rate was 5.1 percent in April, which was unchanged from March but down from 6.4 percent in April 2014. The non-seasonally adjusted rate was 4.9 percent, making April the first month since April 2008 where the local unemployment rate was less than 5 percent. . . Although the gains have not been spectacular, consumer confidence has now risen for 15 months in a row, which is the longest current streak any of the six components. . . Local stock prices were lower at the end of April than at the beginning, but the USD Index uses the average of prices for the entire month as the point of comparison. Although local stocks faltered at the end of the month, they were strong enough in the middle April to lead this component to a modest gain . . . The downward revision in February broke a run of 13 straight increases in the national Index of Leading Economic Indicators. But there was a solid gain in March and a strong increase in April, so the outlook for the national economy remains positive. There was a hiccup in the first quarter though, with the “advance” estimate of the GDP growth rate for that quarter coming in at a disappointing 0.2 annualized rate. This compares to growth rates of 4.6 percent, 5.0 percent, and 2.2 percent for the second, third, and fourth quarters of 2014 respectively. It is still an improvement over the first quarter of last year, when the economy shrank at a 2.1 percent annualized rate.
March’s increase puts the USD Index of Leading Economic Indicators for San Diego County at 138.9, up from March’s reading of 137.7. Revisions in the national Index of Leading Economic Indicators for November, December, February, and March affected the previously reported changes for those months. For the previously reported values for the Index and for the individual components, please visit the Website address given below.
For more information on the University of San Diego’s Index of Leading Economic Indicators, please contact:
Professor Alan Gin TEL: (858) 603-3873
School of Business Administration FAX: (858) 260-4891
University of San Diego E-mail: email@example.com
5998 Alcalá Park Website: http://www.sandiego.edu/~agin/usdlei
San Diego, CA 92110 Twitter: @alanginusdsba