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San Diego Labor Market Sees Further Glimpses of Job Rebound

• Labor Market analysis from San Diego Workforce Partnership, Manpower, and Point Loma Nazarene University comment on latest data versus changes on the ground
• Industry professionals available for insights on the region’s path to economic recovery

San Diego CA— San Diego’s labor market saw further improvement in early March at a time when many businesses were still under lock-down orders. Payroll jobs increased and the jobless rate fell, although below the surface, conditions were not as bright. More importantly, as of mid-April, the job market is now poised for much better days ahead.

Industry Hiring

Nonfarm employers in San Diego County added 5,300 jobs in March after considering the typical, seasonal hiring that generally occurs during this time of year. Without that adjustment, the gain was a more robust 9,900. While the 5,000 gain in leisure and hospitality jobs was encouraging, much of the industry was still shuttered when the job numbers were collected.

Lynn Reaser, Chief Economist for Point Loma Nazarene University, emphasized that this report is very much a backward look. “The economy is moving much faster than the data.” The latest report represents conditions in early March when San Diego County was still in the most restrictive Purple tier. By the middle of last month, the region had improved to the Red zone and it is now in the Yellow tier that allows even more businesses to reopen. The Governor has targeted June 15 as a point when a full reopening of the economy could proceed.

Phil Blair, Executive Officer of Manpower West, commented on the progress he is already seeing on the ground. “We are starting to see the momentum build as San Diego’s economy opens back up. There are lots of opportunities now for San Diegans to go back to work and revive the economy for all.”

San Diego Workforce Partnership’s Senior Economist, Daniel Enemark, observed, “Restaurants across the County are experiencing extraordinary growth in consumer demand, leading to fierce competition for workers. Employers are getting creative in their efforts to recruit and prepare new employees—raising wages, relaxing requirements for previous experience, and even helping workers find vaccine appointments. If you know someone with limited experience looking for a job, restaurants are a surefire place to find one.”

San Diego’s unemployment rate fell further in March to 6.8% from the prior month’s 7.1% after adjusting for seasonal changes. The jobless rate was still more than double its pre-pandemic low of 3.2%. More ominously, the drop was due to a decline in the number of people either looking for work or quitting their jobs. Reaser observed that this suggests some people were discouraged over finding work or withdrew from the workforce to care for children, including their education. The reopening of schools and jobs should now draw people back to the labor force.

Outlook: The Path Ahead

San Diego faces a steep hill to climb before returning to its pre-pandemic job levels. As of March, payroll counts were down 8.3% from their pre-pandemic levels of early 2020. The region still lags the nation (down 5.5%), but ahead of California (off 8.6%).

Early March continued to highlight the disparity in the ability of different industries to recover. Many industries are at 95% or more of their pre-pandemic levels, with utilities and professional and business services leading the way. In contrast, leisure and hospitality payrolls are less than 70% of their pre-pandemic totals.

Blair, Enemark, and Reaser are all optimistic about the outlook ahead. “The County’s vaccination progress should open the door to more and more job gains in the months ahead. A hiring spree could be on the horizon,” Reaser noted. Blair observed, “Many companies may be scrambling to fill key positions,” and Enemark said, “People now must focus on securing the skills and training they need to take advantage of the rebound ahead.”

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