Hiring in San Diego’s high wage jobs, tourism helps keep unemployment rate flat – San Diego Union-Tribune

San Diego’s unemployment rate held steady in February with modest job gains in the region’s higher paying industries and losses in the retail sector.

The county’s unemployment rate was 4.7 percent last month, which was the same as January’s rate, state labor officials said this week. San Diego’s unemployment rate was below the California average of 5.6 percent, but higher than the national average of 4.2 percent.

When the 4.7 percent jobless rate for January was reported last month, it was San Diego County’s highest rate since October 2021.

“San Diego is your typical coastal economy. It’s afflicted with bad housing shortage problems. But relative to the other coastal economies, it is by far and away the most enlightened,” said Chris Thornberg of Beacon Economics. “A lot of multifamily (housing) has been coming online … digging into public transport to connect all these places. And as a result of that San Diego is by far and away the healthiest coastal economy.”

Thornberg pointed to the strength of San Diego’s diverse industries from high tech to tourism and the military sector as counterbalances for seasonal and annual changes in labor.

San Diego’s largest jobs gains in February were in the professional and business services sector, which tend to account for high-earning roles, with 3,100 jobs added. Those gains primarily came from employment services — 1,200 jobs — which supply temporary workers to employers. Other professional service industries, such as life science and tech, contributed about 900 jobs to the monthly total.

Coming off the winter holidays, the leisure and hospitality sector added about 2,500 jobs, many of those roles in food and beverage services. Private education and health services (nursing and social assistance) also gained about 1,900 jobs.

Month-over-month job losses were led by the trade, transportation and utilities sector, which includes retail workers, with a decline of 1,700 jobs.

Daniel Enemark, chief economist at the San Diego Regional Policy & Innovation Center, said the county’s seasonally adjusted unemployment rate was 4.6 percent in February, which was a slight increase from the comparable 4.4 percent rate in January.

“The region gained 6,400 jobs last month while the labor force grew by 4,600 — positive developments, though both of these increases were slightly smaller than we would expect in a typical February,” Enemark said.

He noted that San Diego County’s seasonally adjusted unemployment rate has hovered around the 4.4 percent to 4.6 percent range since November.

The Federal Reserve released an economic projections report Wednesday showing it expects unemployment rates to hold steady over the next three years as it aims to slowly drop inflation to a target of 2 percent. This week, the Fed opted to hold interest rates at 5.3 percent, but signaled that three cuts are coming later this year.

“While the last (Federal Open Market Committee) meeting saw interest rates unchanged, they are planning to lower rates later this year, so all indications suggest we may be in for the good kind of boring — steadily low unemployment throughout 2024,” Enemark said.

San Diego County’s labor force — adults who either have a job or are actively looking for one — was 1.6 million in February, up less than 1 percent in a year. Similarly, the labor force only grew at the same rate of less than a percent from January to February.

Year over year, the region gained about 13,600 jobs, or a 0.9 percent increase.

The biggest annual increase was in private education and health services, which added about 15,000 jobs. A majority of that sector’s gains — 91 percent — are attributed to hiring in health care.

Leisure and hospitality added 6,100 jobs, half of which were in arts, entertainment and recreation. Government jobs, mainly those in local government, contributed 5,700 jobs over the past year.

The largest yearly decline was in professional and business services (8,900); manufacturing (3,200); financial activities, which includes real estate, insurance and investment jobs (2,100); and information, which includes broadcasting, telecommunications, newspapers, publishing industry (1,200).

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

The rate was 5 percent in Los Angeles County, 4.2 percent in Orange County, 3.8 percent in San Francisco County, 4.3 percent in Santa Clara County, 8 percent in Santa Cruz County and 5.6 percent in Riverside County.

Originally Published: March 22, 2024 at 6:04 PM PST