Leading Economic Indicators Up in July

Note: The tentative release date for next month’s report is September 28.
August 31, 2010 -- The University of San Diego's Index of Leading Economic Indicators for San
Diego County rose 0.3 percent in July. Leading the move to the upside were strong gains in local
consumer confidence and help wanted advertising. Building permits and the outlook for the
national economy were also positive, but to a lesser extent. On the downside, initial claims for
unemployment insurance rose sharply, which is a negative, and local stock prices were down
slightly. With July’s gain, the USD Index has now increased for 16 months in a row.
There have been concerns about a possible “double dip” recession at the national level and
similar worries about the local economy. The USD Index remaining positive suggests that a
downturn in the local economy is not on the horizon, but as has been indicated in previous reports,
growth is likely to be very weak. What is keeping the economy stagnant both locally and
nationally is a high unemployment/low consumer spending cycle. With the local unemployment
rate above 10 percent for 14 straight months and incomes for many households flat or declining,
consumer confidence in the economy has fallen. With confidence down, consumers are spending
less and businesses are selling less, which means that hiring is slow and the cycle is perpetuated.
Through streamlining their operations to achieve greater efficiency, companies have been able
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