An index measuring San Diego’s economy released Dec. 18 fell by 1.9 percent in November, the second largest drop ever following a record 2.3 percent decline in October.
Reflecting a now official recession, all six components that make up the University of San Diego’s Index of Leading Economic Indicators for San Diego County were down for the past month, and five components fell by more than 1 percent. The index has declined 31 times in the last 32 months.
Falling local stock prices had the biggest effect on the index, followed by fewer help-wanted ads, higher claims for unemployment insurance (measured as a decrease), reduced number of building permits, declining consumer confidence and a drop in the national index of economic indicators.
Alan Gin, the USD economics professor who compiles the index, said the outlook for the economy looks grim in the short term.
“A combination of lower gas prices, a pickup in home sales spurred by lower prices and interest rates, and a massive federal stimulus package may bring stability to the local economy in the second half of next year,” Gin said.
He predicted unemployment for 2009 to average 7.5 percent (it was 6.8 percent in October), with some pickup in the second half of the year. Job growth for the area was forecast to be less than zero, and could reach a net loss of 5,000, Gin said.
, Mike Allen