Leading Economic Indicators Up in August
Note: A problem with the online help wanted advertising data prevented the release of the Index since the beginning of the year. It was difficult to find a replacement and consideration was given to eliminating the component but the problem was resolved in recent days. The Index will go back to its normal monthly publication schedule and the tentative release date of next month’s report is October 30.
Oct. 8, 2014 — The USD Burnham-Moores Center for Real Estate’s Index of Leading Economic Indicators for San Diego County rose 0.3 percent in August. Four of the six components were up during the month, with initial claims for unemployment insurance and consumer confidence sharply positive and help wanted advertising and the outlook for the national economy up modestly. On the downside, there was a big drop in residential units authorized by building permits and a very small decline in local stock prices.
August’s increase was the sixth gain in the USD Index in the first eight months of 2014. The Index started the year strongly, had two bad months in the spring, and has now increased for three consecutive months. The outlook is for continued solid growth in San Diego’s economy at least through the first half of 2015. The local economy has done well so far this year, with the county on a pace to add almost 31,000 jobs. If that pace continues, it would be the third consecutive year with an increase of more than 30,000 jobs. The last time that happened was during the period 1997 – 2000, which was the “Golden Age” of job growth in San Diego.
| Index of Leading Economic Indicators The index for San Diego County that includes the components listed below (August)Source: USD Burnham-Moores Center for Real Estate |
+0.3% |
| Building Permits Residential units authorized by building permits in San Diego County (Aug)Source: California Homebuilding Foundation |
-1.59% |
| Unemployment Insurance Initial claims for unemployment insurance inSan Diego County, inverted (August)Source: Employment Development Department |
+1.55% |
| Stock Prices San Diego Stock Exchange Index (August)Source: San Diego Daily Transcript |
-0.02% |
| Consumer Confidence An index of consumer confidence in San Diego County , estimated (August)Source: The Conference Board |
+1.02% |
| Help Wanted Advertising An index of online help wanted advertising inSan Diego (August)Source: The Conference Board |
+0.41% |
| National Economy Index of Leading Economic Indicators (August)Source: The Conference Board |
+0.38% |
School of Business Administration, 5998 Alcalá Park, San Diego, California 92110-2492, 619/260-2256
Highlights: Residential units authorized by building permits have been weak in 2014, with the component declining in seven of the year’s eight months. Overall, permits are down 2 percent compared to the same period in 2013, with single-family units virtually flat and multi-family units accounting for most of the modest decline. . . Both labor market variables were positive in August. Initial claims for unemployment insurance fell sharply during the month, which is a positive for the Index and a sign that the pace of job loss is easing. At the same time, hiring plans by businesses picked up as was indicated by an increase in help wanted advertising. The net result was that the seasonally adjusted local unemployment rate fell to 6.0 percent in August, down from 6.2 percent in July and 7.7 percent in August 2013. . . One strong point for the USD Index has been consumer confidence. After a tiny dip in January, consumer confidence rose in every other month of 2014 so far. This is important as consumer spending is typically two-thirds or more of activity in an economy. . . Local stock prices were down 1.87 percent for the year through August as investors became cautious about the prospects for San Diego-based companies. This ran counter to the broader market averages, which were all positive for the year through August. The Dow Jones Industrial Average, the S&P 500, and the NASDAQ Composite were up 3.29 percent, 8.21 percent, and 9.44 percent respectively. . . The national Index of Leading Economic Indicators has been up in every month of 2014, which forecasts continued growth in the national economy. After a weather-related drop of 2.1 percent in the first quarter, GDP growth picked up in the second quarter, with the third estimate coming in at a strong 4.6 percent annualized rate. Job growth has been solid at the national level, with nearly 1.8 million jobs added to the national economy so far this year. As a result, the national unemployment rate fell below 6 percent for the first time since July 2008.
August’s increase puts the USD Index of Leading Economic Indicators for San Diego County at 128.5, up from July’s reading of 128.1. For revisions to the previously reported values for the Index and for the individual components, please visit the Website address given below. The values for the USD Index for the last year are given below:
Index % Change
2013
AUG 127.1 +0.2
SEP 127.6 +0.4
OCT 127.0 -0.5
NOV 127.5 +0.4
DEC 127.5 +0.0
2014
JAN 127.6 +0.1
FEB 127.9 +0.2
MAR 128.6 +0.5
APR 127.9 -0.5
MAY 127.5 -0.3
JUN 127.7 +0.2
JUL 128.1 +0.3
AUG 128.5 +0.3
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: agin@sandiego.edu
5998 Alcalá Park Website: http://www.sandiego.edu/~agin/usdlei
San Diego, CA 92110 Twitter: @alanginusdsba
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