Growth Is Seen to Slow in the Region
Southern California’s economic growth will slow in the next three to six months, in line with expectations of a cooling national economy, according to an index to be released today.
Cal State Fullerton said its Southern California index of leading economic indicators fell 0.15% in the second quarter, versus a revised 0.49% gain in the first quarter. It was the second time in the last three quarters that the index has fallen.
The index is designed as a Southland version of the Conference Board’s national index of leading economic indicators, which also has slipped lately. The national version unexpectedly fell 0.1% in July, and has fallen at a 1.4% annual rate in the last six months, its worst performance since February 2001. However, some other recent economic reports suggest that U.S. growth may not slow as much as had been feared.
“It’s too early to start talking about a recession; this is just indicating a slowdown” in growth and possibly lower job creation, said Cal State Fullerton economist Adrian R. Fleissig, who compiled the index. The index would need to decline further and for more quarters to suggest a recession, he said.
“We just need to wait for more economic data to come out. Consumer confidence was pretty low and that may change,” Fleissig said.
Four of the Cal State Fullerton index’s components were positive, led by regional building permits and declining regional unemployment.
Also positive were the interest rate spread and regional nonfarm employment.
Real money supply, Pacific region consumer confidence and the Standard & Poor’s 500 stock index had negative effects on the local index.
The Fullerton index projects economic activity for Los Angeles, Orange, San Bernardino, Riverside, Ventura and Imperial counties.
