San Diego County’s unemployment rate has dropped to 4.2% as of March, according to state labor officials, continuing a steady decline from 4.5% in January. This improvement has been attributed largely to hiring in the education and tourism sectors.
In comparison, the nationwide unemployment rate holds steady at 4.2%, while California’s rate is notably higher at 5.3%. Despite significant cuts in federal jobs originating from Washington, D.C., San Diego County’s non-military federal workforce has managed to add 100 new positions, bringing the total to 23,900. Conversely, the military workforce in the region, which numbers 22,500, experienced a reduction of 100 jobs.
The job dynamics in San Diego reflect broader national trends, where fears of economic downturn driven by President Donald Trump’s trade policies and volatility in the stock market have not yet resulted in significant job losses. Alan Gin, an economist at the University of San Diego, emphasized that many federal workers have accepted buyouts, which could financially sustain them until September, thus preventing a spike in unemployment figures in the short term.
Gin explained that the true impact of tariff-related job losses may take several months to manifest, beginning with increased prices and reduced consumer spending, eventually leading to layoffs. For the moment, consumer spending has shown an uptick, as indicated by March data from major financial institutions like Bank of America and Citigroup.
The March job report presented a mixed scenario, with notable losses in several sectors countered by substantial gains in education and tourism. The trade, transportation, and utilities sector saw a significant drop of 1,900 jobs between February and March, as did construction, which lost 1,400 jobs, financial activities with a decrease of 500 jobs, and manufacturing, which scaled back by 200 jobs.
In contrast, government employment surged by 2,400 new positions in March, primarily within state government education-related roles. The tourism sector also saw positive growth, adding 1,500 jobs in bars, restaurants, hotels, and casinos.
A broader analysis conducted by Beacon Economics highlighted that California’s job market is predominantly sustained by employment in government, education, and health care sectors. David Ely, a finance professor at San Diego State University, pointed out that sustainable economic health relies on balanced growth across a variety of sectors instead of reliance on just a few.
Ely voiced concerns over workforce mobility, noting that transferring skills from declining sectors to growing ones is not straightforward. Additionally, he mentioned that cuts in capital gains — a substantial portion of California’s budget — could lead to future challenges, especially as much of San Diego County’s recent job growth stems from education positions financed by the state.
The labor force in San Diego County has reached an all-time high of 1.68 million, reflecting a growth rate of 1.9% over the past year. This represents a notable recovery trajectory following the pandemic, with numbers falling from over 1.6 million in March 2020 to a low of 1.5 million the following month before gradually increasing.
On an annual basis, the most significant growth came from the private education and health services sector, which added 9,900 jobs. This sector’s growth encompasses various roles, including nursing, social assistance, and educational positions at private institutions.
Following this was government hiring, which primarily focused on education and accounted for 9,500 new jobs, and the leisure and hospitality sector which added 2,900 jobs. Conversely, every other sector recorded job losses over the year, with manufacturing experiencing the sharpest decline, shedding 4,300 jobs. Other sectors that saw losses include professional and business services, down by 2,900 jobs, and construction, which saw a drop of 1,800 jobs.
The latest job openings in San Diego County — as of March — were dominated by roles for retail salespersons. Following retail, the top in-demand positions included nurses, home health and personal care aides, customer service representatives, and software developers.
Organizations with the most job advertisements included notable names like UC San Diego, Apple, Scripps Health, Starbucks, Qualcomm, and General Atomics.
While state officials do not seasonally adjust the unemployment rates for individual counties, San Diego County’s unadjusted rate of 4.2% places it in the middle tier compared to other California regions. For context, Los Angeles County reported an unemployment rate of 5.6%, while Orange County stood at 3.8% and San Francisco County was even lower at 3.7%. Other counties reported rates ranging from 4% in Santa Clara County to 7% in Santa Cruz County and 5.1% in Riverside County.
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