The SoCal region continues to rebuild its economic landscape, though slowly, according to the latest Southern California Leading Economic Indicator, released today from the Institute for Economic and Environmental Studies at Cal State Fullerton's Mihaylo College of Business and Economics.
Adrian Fleissig, a professor in CSU Fullerton’s Economics and Statistics department, calculates the indicator. “The Southern California Leading Economic Indicator predicts economic activity in the region for the next three to six months; the U.S. Leading Economic Indicator does the same thing on a national level,” Fleissig said. “There is reason to believe some things that are in common, but some thing are different.”
Compared to the end of 2011, the Southern California Indicator increased in the first quarter of the year by 1.39 percent, growing from an adjusted value of 104.31 to 105.75. (The 2011 Q4 Southern California Leading Economic Indicator value of 103.33 has been adjusted to reflect the most recent data available for seasonally adjusted employment data. The 104.31 value more accurately reflects the economic conditions during the period.)
An indicator value over 100 translates as economic growth.
The first quarter of 2012 marks the 10th consecutive quarter of increases for the Southern California Indicator; the last decrease was in the third quarter of 2009.
The Southern California Indicator’s projections are based on a number of national, state and local economic components and data. The U.S. Leading Indicator offers a national context for comparison, taking into account only national factors and economic reports.
“Southern Calfornia typically follows these [national] trends, sometimes lagging, sometimes leading,” Fleissig said. “Recently, the Southern California region has been trailing the U.S. economy.”
The Southern California Leading Economic Indicator is calculated by indexing seven national and regional variables and comprises the economic regions of Los Angeles, Orange, San Bernardino, Riverside, Ventura and Imperial counties. Regional data include non-farm employment, the unemployment rate, the number of regional building permits and the Pacific region consumer confidence index. National factors influencing the Indicator include interest rates, the Standard & Poors 500 stock index and the real money supply.
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