San Diego econ index jumps record 1.9%

Improvements in home construction and employment indicate recovery is picking up steam

By Dean Calbreath

Originally published March 31, 2011 at 12:39 p.m., updated March 31, 2011 at 5:23 p.m.

San Diego's leading economic indicators jumped by their highest level on record last month, driven by an improving job market and a pickup in home construction, the University of San Diego reported today.

"February’s record gain suggests a pickup in the pace of the local economic recovery, which has been slow," said USD economist Alan Gin, who compiles the local index of economic indicators for the university's Burnham-Moores Center for Real Estate.

But Gin cautioned that the county still has a long way to go to before it returns to pre-recession norms. Even though the job market has added 23,000 jobs since hitting bottom in January 2010, it is still has roughly 100,000 fewer jobs than at the beginning of the recession.

Here are how the six leading indicators performed over the last two months (today's report includes January, which was delayed as the state recalculated employment data):

• Home construction. Building permits for residential units more than doubled in the first two months of 2011 compared to the same period in 2010. But that's a relatively low bar to hurdle, since 2010 was one of the worst periods on record.
• Unemployment. First-time claims for jobless benefits hit their lowest point since September 2008. The jobless rate dropped to 10.1 percent in February - or 10.0 percent after adjusting for seasonal trends, including the layoffs of temporary workers hired to handle holiday sales and year-end inventory management. For the first time in nearly two years, it seems that San Diego may be on the verge of returning to single-digit unemployment.
• Hiring. Online job postings in February hit their highest level since November 2008, according to an index maintained by Monster.com. There were pickups in hiring in nearly every industry, including particularly strong increases for business and financial operations, computer and mathematics, life and social sciences and arts, design and entertainment. A Monster.com report released today shows that the upward trend continued in March, except at a slightly slower pace.
• Consumer confidence. Local consumer confidence continued to rebound during the first two months of the year, despite higher gas prices and a stubbornly high unemployment rate. Starting this month, changes in the national index of consumer expectations will be used to approximate local consumer confidence, because the Union-Tribune discontinued its local polling in January.
• Stock prices. As of February, local stock prices advanced for seven consecutive in a row.
• National economy.The pace of national economic growth is slowly accelerating, with the GDP growing at a 3.1 percent annualized rate in the fourth quarter, up from 1.7 percent in the second quarter and 2.6 percent in the third quarter. But economists speculate that the pace may slow down, because of rising fuel prices as well as some supply line disruptions related to the earthquake and tsunami in Japan.

Source:  SignOnSanDiego