ORANGE, CA— The California Leading Employment Indicator remained stable at 110.0 in the second quarter from a revised reading of 110.3 in the first quarter of 2016. An index level above the critical value of 100 indicates positive payroll job growth. The current reading suggests that the pace of job creation in the second quarter will be about the same as the reported growth rate of 2. 8 percent in the first quarter of this year. The California Index of Leading Employment Indicator is comprised of variables found to have a significant influence on California’s payroll employment growth. These variables include movements in the lagged values of real GDP, real exports, the S&P 500 and California’s total construction spending. A weighted average of changes in these variables, based on their relative importance in explaining state employment growth, is used in constructing the index. As shown in the following figure, the index of leading employment indicator is strongly correlated to California’s payroll employment growth. Three of the four components of the indicator series are positive with two showing measureable improvement compared to the prior quarter. • Year-over-year, real exports grew by 0.3 percent in the first quarter of 2016, a positive change of nearly 1.0 percent from the revised decrease of 0.6 percent in the fourth quarter of 2015. • Year-over-year percentage change in construction spending, which is derived from six-quarter lagged real values of total building permit valuation, increased by 7.0 percent in the first quarter of 2016, slightly weaker than the fourth quarter increase of 9.4 percent. • Year-over-year real GDP growth rate of 1.95 percent in the first quarter of 2016 was nearly equal to the revised 1.98 percent increase in the fourth quarter of 2015. • On an annual basis, the S&P 500 decreased 0.4 percent in the first quarter of 2016, compared to the fourth quarter annual decrease of 0. 7 percent. About The Anderson Center For Economic Research The A. Gary Anderson Center for Economic Research (ACER) was established in 1979 to provide data, facilities and support in order to encourage the faculty and students at Chapman University to engage in economic and business research of high quality, and to disseminate the results of this research to the community.
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