San Diego unemployment rate hits highest level since 2021 – San Diego Union-Tribune

San Diego County’s jobless rate rose to its highest level since 2021 as retail, tourism and other sectors dropped to start the year.

The county’s unemployment rate was 4.7 percent in January, up from 4.3 percent the previous month, state labor officials said this week. San Diego’s rate was higher than the national average of 4.1 percent but lower than the California average of 5.7 percent for the same time period.

It was San Diego County’s highest jobless rate since October 2021, with large losses in retail, tourism and professional and business services. It is common for the unemployment rate to rise in January as the holiday season comes to a close.

“I think it is something to note” that the unemployment rate rose, said Alan Gin, an economist at the University of San Diego. “But it has been higher the last couple of years in January. We need to see some more data before we can draw some type of conclusion that the local economy is slowing down.”

San Diego’s biggest monthly job losses were in the trade, transportation and utilities sector, which includes retail workers, with a decline of 7,300 jobs. Leisure and hospitality (work in hotels, bars, casinos and restaurants) dropped by 6,300 jobs.

Another segment that saw job losses, a decline of 3,800, in January was in the legal, scientific, waste management and architectural space. Part of this segment includes higher-earning jobs in the life sciences and tech industry, which declined by 1,700 jobs in January.

San Diego’s tech and life science industries saw a number of layoffs to end the year as companies refocused budgets amid persistent inflation and a tougher fundraising environment. For instance, local high-tech companies, from Resmed to Viasat, engaged in “rightsizing” their workforce.

Daniel Enemark, chief economist at the San Diego Regional Policy & Innovation Center, said the county’s unemployment rate was 4.4 percent — down from 4.5 percent in December — when adjusted for seasonal swings. That compares to the seasonally adjusted U.S. average of 3.7 percent and 5.2 percent in California.

He said the decline in San Diego County’s adjusted rate is “typical for the start of the year, when retail and other seasonal jobs are cut at the end of the holidays.”

“The decrease in seasonally adjusted unemployment is especially impressive given that the region’s labor force grew by 7,000 — slightly more than is typical for January,” Enemark said.

The nation’s workforce was a big topic at President Joe Biden’s State of the Union address Thursday night. He took the opportunity to list legislative wins that invested in America’s workforce and domestic industries, including the CHIPS and Science Act, Inflation Reduction Act and $1 trillion bipartisan infrastructure law.

While steady inflation has weighed on the economy and America’s workforce, Biden touted millions of jobs added coming out of the coronavirus pandemic.

San Diego County’s labor force — adults who either have a job or are actively looking for one — was 1.59 million in January, up about 1 percent in a year. Compared to big losses during the pandemic years, the labor force was largely stable for the past 1 1/2 years.

Phil Blair, CEO of local staffing agency Manpower San Diego, said he’s not concerned about the county’s unemployment rate because he says there are plenty of jobs for people who want to work. He’s seen more competition for jobs as more people enter the job market.

“If you’re thinking of looking for a job, do it now because we’re all hiring,” Blair said. “Slowdowns are inevitable … but get into the job market now — don’t wait until it levels off.”

Most recently, he’s seen a hiring demand for jobs in manufacturing and warehouse workers, while professional service fields like tech have slowed hiring.

The biggest year-over-year gains in employment were in private education and health services (nursing, social assistance), which added 16,300 jobs.

Leisure and hospitality added a total of 6,700 annual jobs; most of those gains were in accommodation and food services with 3,700 jobs added. Government employment increased annually by 4,300 jobs, which can be attributed to the return from holiday breaks.

The biggest year-over-year job losses in San Diego County were in the professional and business services category (9,700 jobs); financial activities, which includes real estate, insurance and investments (1,900 jobs); and manufacturing (1,600 jobs).

State officials do not seasonally adjust jobless rates for individual counties. Compared with other parts of California, San Diego County was about the middle of the pack with its rate of 4.7 percent.

The rate was 5.9 percent in Los Angeles County, 4.2 percent in Orange County, 4 percent in San Francisco County, 4.3 percent in Santa Clara County, 7.4 percent in Santa Cruz County and 5.5 percent in Riverside County.

Originally Published: March 8, 2024 at 5:39 PM PST