By Joshua Ohl
CoStar Analytics
August 27, 2024
Tourism Is Driving Retail Demand and Hiring
With summer recess in full swing, July’s jobs report for San Diego, California, showed an uptick in the unemployment rate from 4.5% to 4.9% in July. That was still far below California’s statewide unemployment rate of 5.8%.
The rise in San Diego’s unemployment rate can also be tied to the rise in the local labor force. Almost 13,000 people joined the labor force in July, according to the Bureau of Labor Statistics. That marked a 0.8% increase month-over-month, and it was one of the few months in the past year to see an increase. In the past 12 months, San Diego’s labor force has fallen by 0.4%, or about 6,600.
The San Diego region reported a drop of 12,200 nonfarm jobs in July. Government recorded the largest month-over-month decline of 15,200 jobs. Nearly 90% of those were tied to local government as San Diego’s schools headed for summer recess.
Conversely, with the summer tourist season in full effect, leisure and hospitality recorded the largest monthly job gains with 1,900 added to payrolls, the majority of which were in accommodation and food services. Hotel occupancy reached 84.8% in July, which was the highest level since last July.
At the same time, food and beverage and food services tenants have been among the most active tenant sectors driving retail demand and hiring. And while operating costs, including higher minimum wages, may weigh on business formation, local market participants anticipate they will continue to be among the most active sectors hunting for retail space.
The office-using employment sectors that consist of professional and business services, information and financial activities, reported 1,300 new jobs in July. That marked one of the best months this year.
However, in the past 12 months, those sectors shed 6,400 positions, followed by 3,700 in manufacturing in the past year. Private education and health services recorded the strongest job growth in the past year, with 12,900 more positions, followed by 5,500 in government.
San Diego’s nonfarm job growth since last July was 0.9%, or 13,500. Both Los Angeles and Orange County outpaced the local job growth in the past year.
Professional, scientific and technical services, which saw job losses of 2% in the past year, had among the most local job postings in July. Those sectors had more than 7,000 positions available, with Apple, UC San Diego and General Atomics among the leading employers with job postings.
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