San Diego’s Economic Pulse: November 2020

Each month the California Employment Development Department (EDD) releases employment data for the prior month. This edition of San Diego’s Economic Pulse covers October 2020 and reflects some effects of the coronavirus pandemic on the labor market. Check out EDC’s Research Bureau for more data and stats about San Diego’s economy.


  1. San Diego’s jobs recovery accelerated in October from previous months, but remains uneven across industries.
  1. San Diego employers brought back 21,500 workers, lowering the unemployment rate from 8.9 percent to 7.7 percent.
  1. Job gains were widespread, and workers returned to the labor force in record numbers.

San Diego’s job market recovered a healthy 21,500 jobs in October from the month prior. Job gains pushed the unemployment rate lower by 1.2 percentage points, from a revised 8.9 percent (initially reported as 9.0 percent) to 7.7 percent. This is in spite of a huge increase in the labor force, which welcomed back some 55,800 workers in October from September.

The topline numbers are encouraging, and last month’s jobs build shows that San Diego has recovered just more than half (52.4 percent) of the 223,700 payroll jobs lost between February and April as the COVID-19 outbreak forced state and county officials to shut down many sectors of the economy. That said, employment remains 7.0 percent lower than it was a year prior, and the jobless rate is still 4.5 percentage points higher than the 3.2 percent logged in February.


Most industries reported job additions last month, with gains concentrated in business and professional services (+5,200 jobs) and construction (+4,100 jobs). Leisure and hospitality and retail, both of which were disproportionately hurt by COVID-related shutdowns, added back 3,200 and 2,100 jobs, respectively. Restaurants brought back 2,400 workers, making up the vast majority of gains in leisure and hospitality. Local government, which includes public school teachers and administrators, brought back 2,700 workers, while state agencies added 2,500 to payrolls last month.

Nonetheless, several sectors shed jobs, providing a partial offset to an otherwise upbeat employment report. Wholesalers let go of 1,200 workers, while federal government agencies, manufacturers, and other service providers laid off a combined 1,500 people.

The recovery across industries has been far from homogenous. Federal government agencies and builders have recovered all of their lost jobs, and then some. Other industries, like utilities and mining and logging, never lost jobs to begin with. Meanwhile, business and professional services are within striking distance of February’s pre-COVID employment peak. Still others, like wholesale trade and information, have only made a tiny dent in their respective jobs recoveries.


Similar to industries, unemployment varies considerably across the county’s 25 cities. For instance, the jobless rate in Solana Beach stands at just 4.2 percent, whereas the rate is perched at a stubbornly high 14.3 percent in Bostonia. The rate for the City of San Diego was 7.4 percent last month, consistent with the 7.7 percent rate logged for the county.


At least several items stand out in the latest employment report.

October’s torrid labor force gains are both impressive and a relief. After an unsettling exodus of 45,100 workers in March and April, the civilian labor force hovered roughly 3 percent lower than its February peak in August and September.

Three percent may not sound like a lot on the surface, but it can have tangible impacts in a number of ways. First, a contracting labor force has the effect of lowering the unemployment rate. That’s because people are no longer counted as unemployed once they leave the labor force. This can have the secondary effect of making the jobs recovery seem stronger than it really is, which can distort business decisions. Second, research suggests that regional economies with smaller labor forces relative to the size of their populations tend to suffer more frequent and more severe downturns in the face of economic shocks. Finally, a shrinking labor force can raise labor costs—already the largest single expense item on most companies’ balance sheets—as firms are forced to compete for a smaller number of job applicants. So, last month’s bounce in the labor force, which easily more than undid the outflow of workers earlier in the pandemic, is a welcome sign, if sustained in coming months.

Another item bears interest, but is somewhat less sanguine. Activity has rebounded for San Diego’s hotels since the spring and summer, yet employment hasn’t followed suit. Both supply and demand for hotel rooms across the county have increased markedly from lows recorded in March and April, and average daily rates being charged for these rooms have climbed more than 50 percent during that time.

Still, accommodations employment is 38.5 percent lower than it was in February and 40.6 percent lower than it was in October 2019. It remains to be seen whether this reflects extra caution on the part of hotel owners, making sure that the risk of future shutdowns has dissipated before bringing workers back, or if it indicates a structural shift in the business model that has permanently reduced the need for employees.


As mentioned, last month’s employment report is encouraging for a number of reasons. San Diego’s jobs recovery has thus far outpaced the rest of the state’s, including the broader Southern California region. However, San Diego’s recovery has lagged that of the nation.

Given the current dynamics, it would take San Diego slightly longer to recover all of the jobs lost from COVID than the U.S. as a whole. If the average pace of job growth from April through October were extended outward, the U.S. would recover all of its lost jobs by February 2021 versus April 2021 for San Diego. Of course, a number of factors could—and likely will—affect this relationship, including the emergence of an effective vaccine and an alarming number of new cases across a broader swath of the nation.

Regardless of the timing, San Diego’s job market continues to heal. Not only are the employment report details mostly encouraging, but efforts are underway to ensure that the recovery reaches a broader group of San Diegans. While the pain of the COVID downturn has been acute, there has arguably never been a better time to concentrate on rebuilding a stronger and more inclusive economy in the future.

For more COVID-19 recovery resources and information, please visit this page.

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