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Economic Index For San Diego County Declines

Sharp Drop In Building Permits Drags Index Down

Audio

Aired 10/28/10

An index tracking San Diego County's economic indicators has declined for the first time in a year and a half.

An index tracking San Diego County's economic indicators has declined for the first time in a year and a half.

The University of San Diego Burnham-Moores Center for Real Estate's Index of Leading Economic Indicators for San Diego County fell 0.1 percent in September.

Although four of the six components were positive during the month, a sharp drop in residential units authorized by building permits was enough to push the USD Index to its first decline since March 2009.

USD Economics Professor Alan Gin called the September decline "worrisome."

"But it's not a signal that a downturn in the local economy is imminent," said Gin. "Economists usually look for three consecutive moves in a leading index in the same direction to signal a turning point in an economy. Further evidence is needed to determine whether September is an aberration or the start of a negative trend."

Gin said San Diego stock prices, consumer confidence, help wanted advertising and the outlook for the national economy were positive during September, but only slightly.

"It was not enough to overcome the big decline in building permits and the smallest negative move in initial claims for unemployment insurance," said Gin."It remains to be seen whether this is just a temporary bump in an upward trend or the beginning of the dreaded 'double dip' recession."

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