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ECONOMY: Region took "turn for the worst" in October
By CHRIS BAGLEY - Staff Writer | ∞
Key measurements showed the region's economy buckling dramatically in October and suggested that the situation will continue to worsen for the next six months, an economist said Tuesday.
The University of San Diego's Index of Leading Economic Indicators fell 2.3 percent in October, the sharpest drop on record. The index is a composite of local consumer confidence, help-wanted advertisements, new unemployment claims, and three other types of economic data.
Share prices of companies listed on an index of San Diego County stocks fell markedly last month, driving down that component of the index by more than 5 percent. The five other components also fell, though less dramatically.
"An already difficult situation took a decided turn for the worst," economist Alan Gin, who compiles the index, wrote in an accompanying report.
Gin and most other regional economists have acknowledged that the area economy has been in recession since summer.
Gin's report comes a day after economists declared the U.S. to have been in a recession since December 2007.
A panel of university and other private-sector economists serve as the nation's semi-official arbiter of business cycles. That panel ---- the Business Cycle Dating Committee ---- typically calls national recessions and expansions six to 12 months after they begin, based on a number of factors including the numbers of employees on payrolls; total personal and corporate income in a given time period; and gross domestic product, the value of all goods and services sold in a given time period. The panel does not forecast recessions or expansions.
Economists don't measure economic activity in individual regions with the same precision.
Gin said Tuesday that he expects the region's "downward spiral" to continue through June. Lower fuel prices and government spending will probably help its economy to stabilize in the second half of the year and then recover in 2010, he said.
Contact staff writer Chris Bagley at (760) 740-5444 or cbagley@nctimes.com. Bagley blogs about local economic trends at http://bizblogs.nctimes.com.
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Art wrote on Dec 2, 2008 9:34 PM:In a recession, the best way to encourage recovery is to encourage business by lowering taxes and reducing regulations. Eliminating those burdens will leave people with more money to spend and more businesses where the money can be spent. A sales tax holiday for all of 2009 is in order. Permanently setting an upper limit on the total of all taxes paid (income, sales, property, permits, fees, etc.) to no more than 10% of income would also aid the recovery.
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