San Diego’s Unemployment Rate Falls to Lowest Point Amid the Pandemic

Hiring Remains Slow Moving

By Joshua Ohl CoStar Analytics October 26, 2021 | 9:01 AM

The headline numbers for San Diego’s job report for September look great, according to the latest release from the California Employment Development Department. The unemployment rate fell to its lowest point amid the ongoing pandemic, dropping 100 basis points since the August report to 5.6%. That rate falls in between the national average and California’s 6.4% unemployment rate. On a year-over-year basis, nonfarm payrolls increased by 3.8%, or more than 51,000 jobs.

The latest report, which includes the time period when extra weekly federal unemployment benefits of $300 for most workers expired, showed that San Diego added a paltry 3,600 jobs to payrolls, most of which were in government. That employment sector added 9,500 jobs, driven by local government educational services, as schools have largely fully reopened.

And although San Diego just recorded the strongest new office leasing activity in a decade during the third quarter, and retail leasing activity rose to pre-pandemic levels during the quarter, many workers remain firmly planted on the sidelines and industries ranging from manufacturing to leisure and hospitality struggle to find enough employees. There is hope that the expiration of extra federal unemployment benefits, a new school year and rising vaccination rates will inspire confidence among those in the workforce to return. However, it may take another month or two for that to play out. As it stands, there were more than 50,000 fewer workers in the labor force in the September report than just prior to the pandemic.

The professional and business services sector added 1,400 jobs in September, almost all of which were for administrative and support and waste management and remediation services. Some of those gains were offset by losses in the professional, scientific and technical services subsector and management of companies.

The leisure and hospitality sector had driven employment gains over the past six months, although it was down 1,500 jobs. The construction and manufacturing sectors also posted job losses, down 1,000 and 1,100, respectively.

Benchmarking employment to February 2020, before the pandemic drove the unemployment rate to nearly 16%, San Diego still has ground to make up. Employment is down 6.7%, or roughly 102,000 jobs, compared to last February, with the leisure and hospitality sector down 17%, or more than 34,000 jobs.

The construction sector is the only one to have more jobs today than in February 2020, with 5.1% growth, or 4,300 more workers.

The retail sector has the most available job openings in San Diego, with nearly 3,000, which was a month-over-month change of 200. Computer occupations and software developers are also advertising nearly 4,500 positions, suggesting that as these jobs are filled, we may begin to see more commercial space leased.


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