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The Big Picture San Diego Blog

Manpower Employment Report: January 2016

March 4, 2016

Phil Blair

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“The local economy picked up steam in January after slowing a bit toward the end of 2015 – a typical trend as seasonal, holiday jobs phase out. Key sectors like manufacturing, construction, engineering, and health care all posted outstanding figures this month. These trends are also reflected in the demand for staffing services, which posted seven percent growth in employment in January.”
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


The California Employment Development Department (EDD) released statewide county employment data today for the January 2016 period, as well as revisions for 2015. This month’s data shows that San Diego's labor market fundamentals remained strong, as unemployment continued to fall amid solid and steady job growth.

The unemployment rate fell to 4.7 percent in January, the lowest since September 2007. The rate is down 0.1 points from the revised December number and 1.2 points from the previous year. The San Diego rate remained much lower than the statewide unemployment rate of 5.8 percent. The national unemployment rate rose substantially to 5.3 percent, well above the San Diego rate. The rate dropped in part due to a typical seasonal decline in the labor force from December to January, but the annual labor force increased by 6,100, with 16,900 fewer unemployed persons since January 2015.

Employment dropped back below 1.4 million in January, but seasonal declines are typical after the holiday season. More importantly, year-over-year employment went up by 38,200, a 2.8 percent increase. San Diego’s growth rate was again much higher than the 1.9 percent national rate. While the year-over-year growth slowed as 2015 progressed, the growth rate climbed again in January, which is a positive sign of momentum in the region.

The private sector drove employment growth in January, as private employment accounted for 90.3 percent of all employment growth over the year. The total private sector grew by 3.1 percent year-over-year, out-pacing the private U.S. growth rate of 2.2 percent.

Private growth was driven largely by service providers, but goods producers experienced another strong month. Manufacturers and construction companies drove 24.0 percent of private job growth in January. The two industries added a combined 8,300 jobs in January. The manufacturing industry in particular had a very strong month, posting 3.4 percent growth, compared to the national growth rate of 0.4 percent in the industry. Revisions showed that 2015 was an even stronger year than previously understood, with an annual 2015 growth average of 3.7 percent.

Professional, scientific, and technical (PST) services, which is strongly associated with the region’s innovation economy, slowed substantially in January, but it is unclear if there are complications with the EDD revision. Prior to the revision, the industry showed6.6 percent growth in 2015. With revisions, that growth is only 1.9 percent. It is unclear if job growth previously categorized as PST was moved to another sector like manufacturing or management, as national revised figures don't show the same dramatic shift. Architecture and engineering, a subset of PST services, showed solid growth of 5.1 percent despite the overall PST figure.

Other key drivers for growth included the region’s healthcare sector, which added 7,100 jobs and accounted for roughly one fifth of the region’s private job growth in January. Tourism experienced strong year-over-year growth, adding 5,900 jobs and contributing to 17.1 percent of growth.

In all, the January report released today showed many continued positive signs for San Diego's economy. The dramatic adjustment to PST employment raises some questions, and we will have to wait and see what was behind this revision by EDD. Otherwise, the region posted another month of solid yearly job growth, in large part due to the booming manufacturing and construction industries. Unemployment fell despite statewide and nationwide increases, and growth was spread out across a variety of key high-wage and base sectors in the region.

This report was performed with assistance from the CBRE research team in San Diego.