The local economy increased again in May, largely thanks to a big gain in local consumer confidence, according to the latest USD economic index released today.
April’s increase broke a two-year string of year-over-year declines in Gin’s index. Along with the boost in consumer confidence, local stock prices increased and so did the outlook for the national economy. Building permits also logged a slight increase.
The negative categories were related to unemployment and help wanted advertising.
It’s still too early, after two months of increases, to call it a trend. If the index is positive in June, that would mark three months in a row, and would be the traditional signal of a “bottom for San Diego’s economy,” wrote Alan Gin, a USD economist. But because economic conditions lag the index’s indicators, the actual trough for the economy would be six to 12 months in the future, he wrote.
At this point, cautious optimism needs to be exercised with respect to the local economy. …
As was mentioned in last month’s report, the rebound is likely to be relatively weak, given that the positive numbers in the leading indicators have not been very strong. Finally, even after the economy turns around, unemployment is still likely to be high as businesses tend to be cautious in terms of hiring coming out of a slump. Still, the outlook is better than just two months ago, and a flat local economy is better than one that is declining.