I track monthly Bureau of Labor Statistics data on employment in the San Diego metropolitan statistical area (employment, along with sales and notices of default are the leading indicators of increasing home prices that I’ve identified in my analysis of the last San Diego upturn, in the mid-’90s).
Over the last four months, while the raw data (pink) shows an increase in employment, when I deseasonalize the data (yellow) (using data over ’88-’06 for such), employment has been flat over Aug.-Nov.:
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San Diego Employm|desc=|link=node|align=left|width=466|height=267]
Admittedly, employment is a lagging indicator of economic outlook. However, I like to track whether something of such fundamental import, such as employment, is behaving as I expect (flat then falling), and it is.
After typing this up, I now feel like the Grinch, having brought up bad (but not surprising) news during the Christmas season.
While raw employment (pink) in San Diego moved up from 1,311.7K jobs in November to 1,312.0K jobs in December, when I deseasonalize the data (yellow) (employment in December always jumps up due to temporary hires for Christmas), employment actually declined from 1,303.2K in November to 1,299.2K in December:
My three factor model requires that, for a signal to buy, employment be moving up (it’s not), NODs be moving down (they’re not), and sales be moving up (they’re not). So, based on my model, I will recommend to my wife that we not buy this month.
Thanks for the update. The December number looks especially bad when compared to the last few years. January usually sees a substantial dip. It certainly will be interesting to see …
rc, my comment about my wife is firmly tongue in cheek. She’s happy to wait, and likes my chart tracking the drop in price of La Jolla resale homes.
But, she’s not excited about waiting five-to-seven years, which may end up being the right waiting time frame to buy a home at the lowest price possible.
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