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June 18, 2021

San Diego’s labor market showed some signs of further progress in May, but some of the numbers were disappointing as the region waited for its ability to fully reopen on June 15.

Unemployment

San Diego’s unemployment rate fell to 6.8% in May from the prior month’s 7.0% after adjusting for seasonal volatility. This occurred as the number of new jobs exceeded the number of people coming back to the labor market or entering it for the first time.

Industry Hiring

Nonfarm employment in San Diego County was essentially flat in May after adjusting for the typical seasonal hiring that occurs during that time of the year. Without that correction, the region added 2,000 jobs, with most of the gains in leisure and hospitality. When the data was collected, San Diego was still in the second least restrictive “orange” tier.

May’s report showed that San Diego has lost some momentum relative to the rest of California and the nation. Over the past two months, the region has not only continued to trail the nation in terms of its recovery, but it is also behind the State as a whole. As of May, San Diego’s employment trailed both the State and the U.S. in terms of its recovery. San Diego jobs were at about 92% of their pre-pandemic high of February 2020. In comparison, California’s recovery was at about 93% and the U.S. was at 95%.

“Two constraints faced San Diego businesses in May,” according to Lynn Reaser of Point Loma Nazarene University. “Many were not allowed to fully reopen and even more could not find employees. Filling job openings will now be San Diego’s major challenge in the months ahead,” she stressed. “San Diego’s economy could soar during the next several months if businesses can find employees.”

Phil Blair, Executive Officer of Manpower West, is dealing with this challenge every day. He says, “The pendulum has totally swung to the side of employees, as businesses across the board compete for workers. Employees are taking more time to consider their options and companies need to present a compelling case for their job opportunities.”

While the recovery was certainly incomplete as of early May when the latest numbers were collected, the Workforce Partnership is pleased to see Leisure & Hospitality employment continue to grow, according to Senior Economist Daniel Enemark. “These sectors remain understaffed, with the Accommodations sector 11,000 workers short and Food Services & Drinking Places about 25,000 workers short of pre-pandemic employment. If you are looking for a job you can start right away, these sectors are urgently seeking workers, with many employers offering better wages and schedules, and requiring less or even no experience.” San Diego’s major sectors continue to recover at different rates. As of May, construction and utility jobs have returned to their pre-pandemic highs, but leisure and hospitality employment is only at 76% of that level.

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