Tuesday, September 27, 2011
San Diego's index of leading economic indicators declined in August, causing economist Alan Gin to say we're at risk for a double-dip recession.
SAN DIEGO The USD Index of Leading Economic Indicators showed a troubling drop for the month of August. The index fell in August by 1 percent, prompted by large declines in consumer confidence and the value of San Diego company stocks.
Alan Gin is an economics professor at the University of San Diego and he compiles the index. Gin said a drop of a full percentage point is very significant.
"This is the biggest drop that we've had since March of 2009," he said. "And it's a little bit worrisome because the index has been down two of of the last three months, so this might signal that we might have some rough times ahead."
In fact, Gin said the drop in the index makes it more likely that San Diego is headed for a double dip recession. He said there was some good news on the San Diego jobs front, as unemployment claims dropped and help-wanted advertising increased.
"The problem is we're down so much -- we lost almost 90,000 jobs due to the Great Recession of the past three years -- at this rate it's going to take four or five years to gain all those jobs back," said Gin.
He added that economists like to see three straights months of declines or increases before they see a trend established. In the coming months, Gin said, we need to hope to see some real growth in the Gross Domestic Product (GDP) before we know we're on our way out of the woods.