Another Sharp Drop in Local Economy

Published: Thursday, August 28, 2008 11:59 AM PDT

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The local economy sustained another sharp drop in July, according to the Index of Leading Economic Indicators compiled by University of San Diego economics professor Alan Gin.

The index has fallen 15 percent since July 2007. Gin said July's reading marked the 10th consecutive month of drops for the index, and the 27th month of declines in the last 28 months.

All of the categories monitored by the index logged declines except for one; building permits showed a slight increase.

Last month, Gin and other economists noted the region had entered a regional recession. Here's how Gin characterized the month's results:

The outlook for the local economy continues to be negative, with no signs of a rebound in sight. Job growth remains negative, although most of the damage remains in the real estate sectors (construction, lending, and real estate). ... One positive development is the drop in gasoline prices, which have fallen more than 70 cents per gallon since the peak earlier this summer.

That good news for gas prices could turn around the fading consumer confidence in the region, which in July was down more than 50 percent compared to a year ago, Gin said. Those results would come in a future index:

It remains to be seen whether the recent decline in local gasoline prices will be enough to turn around the negative feelings among consumers.

-- KELLY BENNETT