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September 18, 2020

Unemployment rate decreases to 12.3% in July

San Diego’s job recovery stumbled in July as the County was placed on California’s COVID-19 watch list. While employment increased after adjusting for seasonal swings, July’s gain was a fraction of June’s encouraging advance. Removal from the State’s list might help this fall but many businesses and individuals are now coping with the loss of government benefits.


San Diego’s jobless rate edged lower in July as some furloughed workers were recalled while fewer teens and others entered the summer job market. The County’s unemployment rate moved from June’s 13.8% to 12.3% in July.
Seasonally adjusted numbers show a similar drop from June’s 13.7% to 11.9% in July.At around 12%, San Diego’s unemployment rate is quadruple the 3% rate that existed at the beginning of 2020 when companies struggled to find workers.

Industry hiring

After calling back the first portion of furloughed workers in June, hiring slowed abruptly in July. Seasonally adjusted numbers show that payrolls advanced by just 4,300 workers last month in sharp contrast to June’s advance of more than 53,000 employees.

A reopening of doctor and dentist offices, manufacturing jobs and some reopening of retailing led the advance. Cutbacks in education and the shuttering or restrictions on restaurants, hotels and entertainment facilities weighed heavily on the economy.
Phil Blair, Executive Officer of Manpower West, points to the strength in temporary hiring. He says, “Firms need flexibility now more than ever as they deal with changing conditions and rules on opening and closing.” Blair also shares that companies are finding that many recalled employees are not ready to return. “They may have child care issues or are hoping that increased jobless benefits will return.”

Economic recovery

San Diego’s economic recovery remains mutedJob gains during the past three months have offset well less than a third of the large losses suffered in March and April. As a result, San Diego’s job total is now 167,000, or 11.0%, below February’s pre-pandemic peak. The region’s loss is greater than that seen for California or the U.S. as a whole.
July’s numbers underscore the economic divide between different economic sectors and industries. Most industries are well below their February job levels, but leisure and hospitality is only at 75% of its February level, while personal services, private education, and information services are also lagging sharply. Financial services, construction, warehousing, and utilities have seen much more recovery success.
“We continue to see large and abrupt shifts in who is hiring and not hiring,” says Peter Callstrom, CEO of the San Diego Workforce Partnership. “Occupational clusters in tourism and hospitality continue to be hit hard and may never be the same.” At the same time, Callstrom points to new jobs for contact tracers and hospital greeters, which could lead to new career paths in health care.
“In less than six months, the job market has changed from the brightest to the bleakest for job seekers,” observes Lynn Reaser, Chief Economist for the Fermanian Business & Economic Institute (FBEI) at PLNU. She points to the value of increasing education and skills to prepare for better opportunities in the year ahead when a vaccine could enable a full recovery to take hold.
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