San Diego Economy May Be Slowing Down
The University of San Diego Burnham-Moores Center for Real Estate's Index of Leading Economic Indicators has slumped the past two months, Professor Alan Gin said Thursday.
The index declined 0.6 percent in August and 0.9 percent in September, the second and third straight months of drop-offs, Gin said.
"The index tends to be a little bit leading in terms of its time frame, so this is suggesting that maybe in the second half of 2016, that we need to worry about things slowing down," Gin said.
He said both months saw major reductions in building permits, as well as negative moves in unemployment insurance, local stock prices and help-wanted advertising.
Consumer confidence followed a slight drop in August with a gain in September, while the outlook for the national economy was flat in August before falling in September, according to Gin.
Three straight months of declines is a traditional signal of an economic turning point, he said.
"I don't think it'll be bad enough to be in a full fledged recession, but I think what is going to happen is our rate of growth is going to slow, particularly in terms of employment growth and that could affect our unemployment rate," Gin said.
Initial claims for unemployment insurance have climbed and help-wanted advertising has fallen for four consecutive months, according to the professor.
Meanwhile, residential units authorized by building permits in September hit their lowest level since October 2010, he said.
Because of strength earlier in the year, residential units authorized are still up 7 percent through the end of the third quarter compared to the same period last year, Gin said.
The index stood at 137.6 in September. Despite the recent dips, that level is about 8 1/2 points above last year at the same time.