Dragged down by declines in consumer confidence, reduced building permits and increased claims for unemployment insurance, an index measuring San Diego’s economy recorded its first drop in 27 months in June.
The 0.2 percent decline in the University of San Diego’s Index of Leading Economic Indicators wasn’t much, but sufficient for its compiler, USD economics professor Alan Gin, to be concerned.
“Economists usually look for three consecutive changes in one direction in a leading index as a signal of a turning point in an economy, so it remains to be seen whether this is a beginning of a trend or simply a one-month aberration,” Gin said.
While the area’s unemployment rate rose to 10.4 percent, its high for 2011, in June, Gin noted that average employment for the first half of the year showed a net gain of nearly 17,000 jobs over the same period of 2010.
In June, residential building permits slowed dramatically compared with the previous months, but were up 38 percent from the like period of 2010, with practically all the gains in multifamily units.
The largest single decline, at 1.06 percent, was in consumer confidence. Gin said increased gasoline prices and an uncertain labor market were behind the drop. Local stock prices also decreased.
Two of the six components in the index showed gains. Help-wanted ads increased and there was a rise in the national Index of Leading Economic Indicators.
— Mike Allen