USD Magazine Summer 2009

in a row. And that’s important because that signals what’s going to happen in terms of construction employment. We’ve already lost around 27,000 jobs from the peak in construction employment, and this means that people are not going to be building houses. A second thing I’m looking at is consumer confidence. That has dropped to historic lows. That’s important because consumer activ- ity is typically two-thirds of economic activity. It particularly affects big-ticket sales. If people are worried about their jobs and incomes, they’re not going to be going out and buying homes and buying cars. And we need them to do it at this point. The other two components that have been problems are related to the labor market. Initial claims for unemployment insurance have surged, so that’s a negative for the index, and there are more peo- ple losing their jobs now. And help-wanted advertising, a measure of hiring, is down. More people are losing jobs, and we’ve got less hiring. So that’s caused the unemployment rate to hit 8.8 percent in February in San Diego County, and it could easily hit 10 percent by the time this is over. I don’t think it will go much higher than that, but still it’s pretty bad. WHERE ARE WE HEADED THIS SUMMER? Things should pick up because of our tourism. That’s going to be an important aspect this year because of the tough economic shape we are in. What’s that going to mean for San Diego tourism? Are we going to get less peo- ple coming from out of town or is that going to be counterbalanced by people staying in San Diego and going to the zoo instead of taking a big trip elsewhere? I think you’ll see continued activity in housing. Sales have already gone up; that’s because there are so many homes that have been foreclosed on. There are a lot of bargains out there. So some people are starting to nibble. Interest rates are at historic lows. It’s a good combination to buy a home: prices have come down significantly, and interest rates are at record lows. The combination has pushed the region’s affordability index to a record high, meaning a greater pro- portion of local households can now afford to buy a home than has ever been the case. I see the housing market possibly bottoming out at the end of the year, although I don’t expect it to rise until 2010 at the earliest. WHAT ARE YOUR PREDICTIONS FOR BOTH THE LOCAL AND NATIONAL ECONOMY? I think the national economy will reach a bottom in the latter part of this year. The rebound from the bottom is expected to be weak and may take a while to manifest itself. Job loss- es and a high unemployment rate are likely to last through the end of this year. Retail sales will likely remain weak, but home sales are expect- ed to continue at a relatively high level. All of this is the expected out- look for San Diego too. I usually don’t do long-run projections, but I would expect San Diego to rebound nicely and move back to a position where it is outperforming the national economy.

POSTCARD PROVIDED BY THOMAS RAGAN

[ d e a r e d i t o r ] The recent article on Irving Parker in the spring USD Magazine (“One Great Man”) brought back memories. My initial period of matriculation was 1959-1962. During that time, Dean Parker was always one to avoid. It wasn’t until I returned in 1967 after a brief military tour of Asian soils that I realized what a good friend he was. I finished my degree requirements in 1968 with Dean Parker’s guid- ance through the mire of veterans’ benefits. I personally experienced much of the growth and develop- ment that was taking place at USD. Prior to even attending the university, I worked on the grounds crew digging, plant- ing and digging some more. As a student, I worked in the kitchen, and upon my return I worked as one of the first student security patrol guards … but I digress. The real purpose of this letter was to tell you about the picture postcard that I recently came across (above). It is of The Immaculata somewhere in the late ‘50s to early ‘60s. (The white car alongside the chapel appears to be a 1957 Plymouth.) Obviously, at the time there were no trees or other plantings and Alcalá Park was a wide-open roadway. My first inclination was to test the eBay waters for a buyer. Then the memories of my ethics classes kicked in, and I felt that the postcard should be part of the 60th anniversary display. I am going to be in San Diego the last week of May and would greatly want to see the university and all its changes. I look forward to reading about USD; the magazine is always well-done and informative. — Thomas C. Ragan ‘68

”

Find current and archived USD Index of Leading Economic Indicators reports at www.sandiego.edu/~agin/usdlei.

9

SUMMER 2009