Note: The tentative date for the release of next month’s report is November 29. October 31, 2012 -- The USD Burnham-Moores Center for Real Estate’s Index of Leading Economic Indicators for San Diego County rose 0.6 percent in September. All six components in the Index were up, with the strongest gains in building permits and the outlook for the national economy. Local stock prices were up moderately, while the other three components (initial claims for unemployment insurance, consumer confidence, and help wanted advertising) were only slightly positive. September’s gain reversed a decline in August, which was the first drop in 10 months. The solid gain in the USD Index combined with the fact that all six components were positive alleviates some of the concerns generated by last month’s report. The local economy continues to be sound, particularly in terms of employment when compared to 2011. At the end of September, nonfarm wage and salary employment was up 28,000 compared to the same period in 2011. The biggest gains in employment were in administrative and waste services (+7,100 jobs), leisure and hospitality (+6,300), health care (+5,000), and retail trade (+4,800). The only sector that experienced a decline in employment was manufacturing, which is down 1,100 jobs. Manufacturing employment in San Diego has fallen in 10 of the last 11 years. Job growth is expected to remain solid for the rest of the year and at least through the first half of 2013. 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 +0.6% Building Permits Residential units authorized by building permits in San Diego County (September) Source: U.S. Census Bureau +1.35% Unemployment Insurance Initial claims for unemployment insurance in San Diego County, inverted (September) Source: Employment Development Department +0.18% Stock Prices San Diego Stock Exchange Index (September) Source: San Diego Daily Transcript +0.75% Consumer Confidence An index of consumer confidence in San Diego County , estimated (September) Source: The Conference Board +0.08% Help Wanted Advertising An index of online help wanted advertising in San Diego (September) Source: Monster Worldwide +0.05% National Economy Index of Leading Economic Indicators (September) Source: The Conference Board +1.22% Highlights: Residential units authorized by building permits advanced for the seventh month in a row and finished the third quarter up 14.6 percent compared to the same period in 2011. The strength continues to be in multi-family units authorized, which were up 27.7 percent through the third quarter. A weak September hurt single-family units authorized, which had been solid in recent months. Single-family units authorized were down 4.1 percent through the end of the third quarter. Both labor market variables were positive for the first time in four months. Initial claims for unemployment insurance were lower in September, which is a positive for the Index, while help wanted advertising advanced for the 21st consecutive month, although just barely. The net result was that the local unemployment rate fell to 8.4 percent in September, down from a revised 9.0 percent in August. After falling in August, consumer confidence increased for the ninth time in ten months in September. While local stock prices were up for the month, they lagged the gains in the broader market averages for the year. Local stocks were up 7.0 percent through the end of the third quarter, compared to a 10.0 percent gain for the Dow Jones Industrial Average and a 19.6 percent rise in the NASDAQ Composite. For the sixth month in a row, the direction of the national Index of Leading Economic Indicators switched compared to the previous month. The outlook for the national economy remains mixed. The “advance” estimate for third quarter Gross Domestic Product came in at 2.0 percent. That was higher than expected and above the 1.3 percent growth rate of the second quarter, but still below the level needed to generate significant job growth. National job growth was only 114,000 in September, but the unemployment rate dropped to 7.8 percent, the first time it has been under 8 percent since January 2009. September’s increase puts the USD Index of Leading Economic Indicators for San Diego County at 122.3, up from August’s revised value of 121.6. Revisions in the national Index of Leading Economic Indicators caused the previously reported value of 121.7 to be revised downward and the previously reported unchanged reading to be revised down to -0.1 percent. 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: Index % Change 2011 SEP 116.1 +0.1 OCT 115.9 - 0.2 NOV 116.2 +0.2 DEC 116.9 +0.6 2012 JAN 117.7 +0.7 FEB 118.7 +0.9 MAR 119.8 +0.9 APR 120.5 +0.6 MAY 121.2 +0.6 JUN 121.2 +0.0 JUL 121.7 +0.3 AUG 121.6 -0.1 SEP 122.3 +0.6 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) 484-5304 University of San Diego E-mail: agin@san.rr.com 5998 Alcalá Park Website: http://www.sandiego.edu/~agin/usdlei
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