Latest USD Economic Index Takes Biggest Drop Ever - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

Latest USD Economic Index Takes Biggest Drop Ever

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Guest Blog by University of San Diego economist Alan Gin\r\n\r\nUniversity of San Diego economist Alan Gin said his index of local economic indicators fell 2.3 percent in October, the biggest one-month change in the index in either direction for his data going back to 1977. He talked about the reasons behind the decline and prospects for the economy in 2009. \r\n\r\nQ: What was behind Octoberís big decline? \r\n\r\nA: ìWhat started as a problem related to real estate spread into the financial system as the viability of some of the countryís biggest financial institutions was called into question. The problems in the housing and financial markets in turn have impacted the rest of the economy, as retail and auto sales have plummeted which threatens the loss of more jobs and further weakness in the housing and financial markets.î\r\n\r\nQ: What component of the index do you think is cause for the most concern? \r\n\r\nA: ìThe labor market outlook remains very weak with both initial claims for unemployment insurance and help wanted advertising remaining under pressure. The net result was that the local unemployment rate surged to 6.8 percent in October, the highest level since July 1995.î \r\n\r\nQ: Looking for a bright spot, the market was in positive territory Tuesday morning after Mondayís big sell-off. Do you think that means we might be near a bottom in the stock market? \r\n\r\nA: ìItís encouraging that weíre still off yesterdayís bottom but we have a long way to go here. I think we have to throw out all the old rules at this point.î \r\n\r\nQ: But you do see a recovery, albeit a weak one in 2009 for the local and national economy? \r\n\r\nA: ìThe economy is expected to stabilize in the second half of the year due to a combination of lower oil and gas prices, increased home sales and another stimulus package by the state and federal governments. I think infrastructure spending would help us and any sort of relief to state and local governments would also be a boost, given the problems we are facing in those areas.î \r\n \r\nCLICK HERE to see the entire report.
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