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A local economic index recorded its largest drop ever in October, said the University of San Diego’s Alan Gin this morning. It was the largest month-to-month change in either direction — up or down — on record. Gin looks at data stretching back to July 1977; his first index was released in October 1991.
Gin’s index examines six indicators: building permits, the number of people filing for unemployment insurance, stock prices for local companies, consumer confidence, the preponderance of help wanted advertising, and the health of the national economy.
In October, the month measured for the most recent index, every one of the six components was down “and down significantly,” Gin said. Making the biggest dents in the index were local stock prices and claims for unemployment insurance.
The index has now fallen for 30 of the last 31 months.
Gin expects the economy to stabilize in the second half of 2009, a prediction he hangs on three factors: lower oil and gas prices, a lift in the number of home sales and a federal stimulus package that could place unemployed workers in jobs in infrastructure or relief for state and local governments, he said.
I asked Gin: With the largest drop on record coming in October 2008’s index, is it a rosy prediction to expect a stabilization in less than a year?
“It could be optimistic,” he said. “But the three factors that I mentioned will help.”