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The Big Picture San Diego Blog


Manpower Employment Report: July 2015

August 21, 2015

Phil Blair

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“Every indicator points San Diego in a positive direction, especially employment growth figures, which are really picking up speed. Every year, thousands of education workers temporarily respond as unemployed once schools go on summer break, but these people do not actually leave the labor force. We should not be concerned about the four tenths uptick in unemployment.
Phil Blair, Executive Officer
Manpower San Diego


This post is part of an ongoing monthly series dedicated to the California Employment Development Department (EDD) monthly employment release and is brought to you by Manpower. Click images to enlarge in a new tab/window.

Highlights

The California Employment Development Department (EDD) released statewide county employment data today for the July 2015 period. This month’s data shows that while unemployment climbed slightly in June, the labor force grew and the economy continued growth at a steady rate.

The unemployment rate climbed above 5 percent to 5.4 percent in July. The rate is 1.5 points lower than the previous year and 0.4 points higher than the previous month. The California average rate also climbed to 6.5 percent, while the U.S. average rate climbed slightly to 5.6 percent, meaning San Diego remained much lower than the state and national averages.

The unemployment rate almost always climbs substantially from June to July due to seasonal effects related to education employment. Every year, thousands of education workers temporarily report to EDD as unemployed once schools go on summer break, but these people do not actually leave the labor force. From June to July 2015, public and private education employment fell by 14,500. This drives up the unemployment rate despite an otherwise healthy economy. Looking at the year-over-year change demonstrates this another way. From July 2014 to July 2015, total unemployment filings fell by 20.0 percent and the rate fell by 1.5 points, all while 26,600 people were added to the labor force.

Unemployment Rate

The region’s economy picked up dramatically. San Diego's total nonfarm employment grew by 3.6 percent year-over-year, adding 48,200 jobs from July 2014 to July 2015. This is the highest year-over-year percent change since March 2012 to March 2013. San Diego's growth rate was much higher than the 2.1 percent national rate. The San Diego region is now expected to average 3.2 percent annual growth in 2015, compared to only 2.3 percent in 2014.

Despite the overall seasonal decline in employment, the private sector economy actually added more than 10,000 jobs from June to July, mostly in the tourism and innovation economy. Year-over-year, the total private sector grew by 3.9 percent, outpacing the private U.S. growth rate of 2.4 percent. Roughly three-fourths of all year-over-year private job growth in San Diego came from five key sectors: construction, manufacturing, tourism, health care, and professional, scientific and technical services (PST).

Total Nonfarm Employment

Goods-producing industries continued to show strong growth, alone accounting for 17.1 percent of all private job growth. From July 2014 to July 2015, the manufacturing industry added 2,500 jobs and grew by 2.6 percent growth. The ship and boat building industry continued to grow at an outstanding rate. Meanwhile, the construction industry added 5,000 jobs and grew by 7.8 percent.

The professional, scientific and technical services (PST) sector grew by 7.4 percent year-to-year, and accounted for 21.9 percent of all annual private job growth—the most of any sector in the region. This sector represents many of our innovation employers. Scientific research and development services, a subsector of PST that represents many cleantech and life science companies, grew at an impressive 5.2 percent rate.

YoY

Other key drivers for growth included the region’s health care sector, which added 6,200 jobs and accounted for approximately 14.2 percent of the region’s private job growth. The tourism industry added 8,500 jobs and accounted for 19.4 percent of the region's growth. Employment services or staffing in the region grew by 1,600 jobs and has been steadily increasing all year. All of these industries grew faster than the overall private economy.

It is most important to emphasize that the seasonal climb in the unemployment rate is not indicative of problems in the economy. In fact, the economy appears to continue to pick up speed, particularly in a few key sectors. The unemployment rate is expected to fall the rest of 2015, likely dipping back below 5.0 percent by September. Compared to this time last year, the labor force is way up, unemployment is way down and employment is growing at a faster pace than it has for years, which are all great signs for San Diego.

Contributions

Note: Our Economic Indicators Dashboard will show how our unemployment rate compares to other US metros and the US total rate when that information is released in the coming weeks.