San Diego’s Data Bites: March 2021 Pt. 2

SAME INTEL, NEW GREAT ‘TASTE’

In case you missed it, EDC has launched a fresh take on our long-standing Economic Pulse. Welcome to the second edition of San Diego’s Data Bites!

Each month the California Employment Development Department (EDD) releases employment data for the prior month. This edition of San Diego’s Data Bites covers February 2021 and reflects the lingering effects of the coronavirus pandemic on the region’s labor market. Check out EDC’s Research Bureau for more data and stats about San Diego’s economy.

Key Takeaways

  1. San Diego employers added back 31,900 jobs in February, undoing the lion’s share of January’s loss of 37,900 payroll positions.
  1. The unemployment rate dropped to 7.2 percent from January’s 8.0 percent even as nearly 33,000 people joined or rejoined the labor force.
  1. February’s employment report is reason for cautious optimism that the economy has turned the corner, but there is still work to be done. Employment remains 8.7 percent below year-ago levels, the labor force is still 2.1 percent smaller than a year ago, and the outlook is wrought with uncertainty.

First glance

San Diego’s labor market bounced back in February, following two consecutive months of declines. San Diego employers added back 31,900 jobs, undoing the lion’s share of January’s loss of 37,900 payroll positions (revised from -38,600) and lowering the unemployment rate to 7.2 percent from January’s 8.0 percent (revised from 8.1 percent). Even better, the unemployment rate dropped as 32,900 people joined or rejoined the labor force—more on that below.

Industry view

Job gains were widespread across industries. Every sector except Wholesale Trade, Retail, and Healthcare and Social Assistance added jobs, and losses in those sectors were de minimis.

The volatile Leisure and Hospitality industry added 12,800 new jobs, following a loss of 11,500 in January. Business and Professional Services firms also added 6,800 jobs, while Construction and Other Services—which includes dry cleaners, laundromats, and other personal services—each gained 4,100 positions.

Gains in Business and Professional Services were led by Administrative and Support Services, which added 4,900 new positions. This subsegment also includes temporary staff, and growth in this field can sometimes be a positive bellwether for future gains as those temporary staff members are hired on permanently.

Nonetheless, it’s important to keep last month’s positive report in perspective. Employment in every industry, except Construction and Utilities, remains below year-ago levels. For example, despite last month’s push, Leisure and Hospitality employment still rests some 33.4 percent below its February 2020 level, and Other Services employment is still 22.9 percent lower than it was a year ago.

San Diego workers flock back to the workforce

Perhaps the most encouraging piece from February’s employment report is the surge in the labor force. Labor force participation among women and minorities has plummeted across the country since the pandemic ensued; and while EDD doesn’t report labor force statistics across demographic groups like the U.S. Bureau of Labor Statistics (BLS) does, it can be safely assumed that a similar dynamic has played out locally. As such, the return of these workers is a welcome sign, if sustained, because it will help to mitigate the cumulative effects of income losses among those most vulnerable groups.

Again, however, it is important to keep this all in perspective; San Diego’s labor force is still 2.1 percent smaller than it was in February 2020, and this has masked the true extent of the remaining weakness in the job market. This is because people who leave the labor force are no longer counted as unemployed by EDD and the BLS. If there were as many people in the labor force in February 2021 as there were a year earlier, the unemployment rate would still be perched at 9.4 percent, more than two percentage points higher than the officially reported 7.2 percent last month.

Wrapping it up

In sum, the February employment report suggests the regional economy may be turning the corner after a couple of disappointing employment reports in December and January. To be sure, COVID-19 cases have declined steadily in San Diego County in recent weeks, and the strong drive to get vaccine shots into people’s arms is most likely reassuring companies that the end of the pandemic is finally within striking distance. If so, then we can expect job gains to continue in coming months.

Nonetheless, the outlook is wrought with uncertainty. It remains unclear whether current vaccines will be effective in protecting against new variants of COVID-19. If not, then a future spike in coronavirus cases could force additional closures and restrictions, thereby hamstringing the recovery. In addition, the pandemic has led to wholesale shifts in how companies do business. Consequently, not every company will need to replace all of the workers that were let go, and thousands of the jobs lost over the past year may never return. Moreover, many businesses forced to shut down over the past year may not reopen, meaning that the weight of the jobs recovery will rest on fewer companies, which could push the timeline for a full recovery further into the future.

All of this is to say, we should be cautiously optimistic. On balance, the prognosis is good that San Diego will enjoy a relatively strong recovery this year and into 2022, but there is still much work to be done. Now, more than ever, it is necessary that we get this recovery right.

Training and upskilling will be vital for the thousands of workers whose jobs may never return. EDC’s Advancing San Diego program is working to do just that.

It will also be imperative that San Diego small businesses are connected to large buyers in order to keep remaining businesses in the region healthy and to help spur a new wave of entrepreneurship to meet the needs of San Diego’s largest institutions and employers. EDC’s Anchor Collaborative is working with large local businesses to help ensure big companies “shop local” for their procurement needs. Our research estimates that a one percent shift in procurement spending by large companies to local businesses could create thousands of new jobs in the region.

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San Diego’s Data Bites: March 2021

Same intel, new great ‘taste’

EDC is excited to unveil a fresh take on our long-standing Economic Pulse. Welcome to San Diego’s Data Bites!

Each month the California Employment Development Department (EDD) releases employment data for the prior month. This edition of San Diego’s Economic Pulse—now ‘Data Bites’—covers January 2021 and reflects the effects of the coronavirus pandemic on the labor market as well as benchmark revisions to 2020 employment data. Check out EDC’s Research Bureau for more data and stats about San Diego’s economy.

Key Takeaways

  1. San Diego employers eliminated 38,600 payroll jobs at the start of the year. Job losses in January are typical as temporary holiday staff is let go, but December’s report showed no surge in holiday hiring in 2020.
  1. Job losses nudged the unemployment rate higher to 8.1 percent from December’s 8.0 percent even as nearly 18,000 workers fled the labor force.
  1. Annual benchmark revisions to 2020 employment data revealed that the economy suffered steeper job losses last Spring and ended 2020 with roughly 30,000 fewer jobs than were initially reported.

San Diego’s labor market kicked off 2021 on a sour note. Local employers eliminated 38,600 payroll jobs in January, nudging the unemployment rate higher to 8.1 percent from 8.0 percent in December even as nearly 18,000 workers fled the labor force.

Job losses are typical in January as businesses roll off temporary holiday help. However, what makes this report unique is that January’s job losses followed a decline of 6,200 positions in December (revised from an initially reported -5,300 jobs), which is extremely atypical for the holiday season. In fact, December’s decline marks only the sixth time in 72 years where employers have let more workers go than they hired.

January’s dismal jobs report likely reflects the struggles of local businesses amid the ongoing COVID-19 pandemic rather than seasonal factors. Burning Glass estimates that San Diego consumer spending is still trending about 10 percent lower than it was before the pandemic, and data from Womply show that roughly 30 percent to 40 percent—or between 30,000 and 40,000—local businesses have been forced to close over the past year.

Industry view

Employment declines were widespread across industries. With the exception of Manufacturing and Utilities—which added a meager 100 jobs apiece—every industry either lost jobs or stayed flat. Hardest hit was Leisure and Hospitality, which gave up 12,200 positions and continues to be the most negatively impacted by the pandemic. Retail, which shed 6,300 jobs, was a distant second, erasing nearly all of the gains made since Spring 2020. The decline in Retail, although disheartening, was somewhat expected, however, since national retail sales and local consumer spending have both remained weak in recent months.

The nearly ubiquitous loss of employment across industries is another indication that labor market weakness in January stems from COVID-related measures rather than seasonality. In a typical year, January job losses would be focused around Leisure, Hospitality, and Retail as holiday staff is let go. However, in more normal times, most other industries have remained stable instead of laying off workers like they did this year.

2020 was even worse than we thought

Also included in January’s jobs report were benchmark revisions to the 2020 employment figures. Typically, in periods of contraction, employment revisions are negative, and that is exactly what EDD reported.

Benchmark revisions revealed that San Diego hemorrhaged 248,000 jobs between February and April 2020, which is 25,000 more job losses than initially reported. Leisure, Hospitality, and Retail accounted for around 16,000 of those additional losses. By the end of the year, revisions showed 30,100 fewer nonfarm payroll jobs in the region compared to the initial estimates.

The additional loss of jobs also meant that the unemployment rate was revised higher. Initial estimates showed the rate peaking at 15.2 percent in April 2020; revised data revealed that joblessness peaked at a significantly higher 15.9 percent, which is more in line with EDC’s estimates at the time.

You can use the below graphic to explore how revisions impacted total employment in the region, as well as each of the industries tracked by EDD on a monthly basis.

The road ahead

San Diego’s job market is entering 2021 on a weaker footing than initially thought. More jobs need to be recouped, and there are fewer businesses to help carry that weight. Together, this implies that the recovery will take longer than anticipated even after San Diegans have been vaccinated against the novel Coronavirus.

Still, there are actions we can take to help speed things along and emerge even stronger than before. Now, more than ever, it is necessary that we get this recovery right.

Training and upskilling will be vital for the thousands of workers whose jobs may never return. EDC’s Advancing San Diego program is working to do just that.

It will also be imperative that San Diego small businesses are connected to large buyers in order to keep remaining businesses in the region healthy and to help spur a new wave of entrepreneurship to meet the needs of San Diego’s largest institutions and employers. EDC’s Anchor Collaborative is working with large local businesses to help ensure big companies “shop local” for their procurement needs. Our research estimates that a one percent shift in procurement spending by large companies to local businesses could create thousands of new jobs in the region.

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San Diego’s Economic Pulse: January 2021

Each month the California Employment Development Department (EDD) releases employment data for the prior month. This edition of San Diego’s Economic Pulse covers December 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.

Key Takeaways

  1. San Diego lost 5,300 jobs, on net, in December, which is not typical during the holiday season.
  1. The unemployment rate jumped to 8.0 percent from 6.6 percent in November amid job losses and growth in the labor force.
  1. San Diego’s “K-shaped” recovery will exacerbate longstanding structural problems in the economy, making the case for an inclusive growth strategy even stronger.

Labor Market Overview

San Diego’s labor market suffered a setback in December after new business restrictions were put into place to combat a surge in COVID-19 infections and an alarming decline in ICU bed capacity. Local employers let go of 5,300 workers, on net, last month, lifting the unemployment rate to 8.0 percent from 6.6 percent in November. A drop in employment for the month of December is atypical, since holiday hiring is usually in full swing. Last month’s decline marks only the sixth time in 72 years where employers have let more workers go than they hired in December.

San Diego’s unemployment rate is lower than California’s 8.8 percent but significantly higher than the nation’s rate of 6.5 percent in December.

The causes for the rise in San Diego’s December unemployment rate are two-fold, and the news isn’t entirely bad: First, and most obviously, job losses drove the rate higher. However, this was compounded by an increase in the labor force of 12,200 people. The labor force vacillated for most of 2020 but ended the year close to its February, pre-pandemic level—good news for the labor market heading into 2021, if it is sustained.

Industry View

Leisure and Hospitality employers let go of 9,600 workers in December, which was more than enough to lower total employment. The lion’s share of hospitality job losses came from Accommodation and Food Services, which gave back 10,300 positions. Other Services, Government, Manufacturing, Educational Services (private, non-government), and Financial Activities each lost jobs. However, the losses for all of those industries totaled just 4,300, less than half of the layoffs experienced in Accommodation and Food Services alone.

The weakness in Leisure and Hospitality drove an even larger wedge between the jobs recovery for high-paying and low-paying positions, exacerbating a worrisome trend where the income and wealth gaps in San Diego will likely widen exponentially as a result of the pandemic-fueled recession.

Despite the decline in topline employment, job gains were apparent in a number of industries. Business and Professional Services added a healthy 2,500 workers in December, fueled by a gain of 2,700 in the crucial Professional, Scientific, and Technical segment, while retailers brought on 1,900 additional employees despite weak retail sales.

Behind the Numbers

All in all, December’s lackluster employment report is a downer, but not an unexpected one. With COVID-19 cases surging in the region and hospitals running out of valuable space for patients, business restrictions became necessary from a public health perspective.

As mentioned, the decline in employment last month is not typical for December, but it may bode well for January’s employment report. Under more normal circumstances, January typically reveals job losses as seasonal workers are let go. However, given that seasonal hiring was more tepid in 2020, layoffs in January may be less pronounced.

Labor force growth in December is also encouraging if it can be sustained. The extension of federal emergency unemployment benefits should help to keep a floor under the workforce, since only people in the labor force can claim them. Additionally, despite the sharp drop in Leisure and Hospitality employment last month, many firms in the region are still hiring. Therefore, we can expect people to remain in the labor force as long as job growth resumes as we enter 2021.

Unfortunately, these are about the only silver linings in December’s jobs report.

Annual revisions to the 2020 jobs numbers will be released by California EDD on Friday, March 12. Typically, revisions show greater job losses than were initially reported during recession periods. This is because the Labor Department estimates the pace of business formations in a given month, which usually assumes the addition of at least some new jobs as new firms come online. However, a Census-like count of business formation carried out after the initial estimates are released usually shows more business closures, on net, which thereby reduces the level of employment. So, in all likelihood, 2020 revisions could reveal deeper job losses last year than initially reported.

The shape and timbre of the jobs recovery means that even more work will be needed to shore up the local economy. The exponential widening in wealth and income gaps from the “K-shaped” recovery to-date will mean even more aggressive policies aimed at protecting and empowering our lowest-paid workers. Also, declines in the labor force earlier in 2020 were in large part the result of women leaving the workforce. If 2021 exhibits a repeat of that contraction, then it will almost certainly lead to greater disparities in gender pay. Finally, housing has continued to become even less affordable amid high unemployment and rising home values across the region.

It will take intentional and effective action to get this recovery right. It is now more important than ever to ensure greater access to higher education and worker training for our region’s lower-income households. Additionally, companies may also want to consider employee-ownership models, like the one Taylor Guitars recently announced, to give workers a larger stake in their economic fortunes. By offering a pathway to higher paying, more stable employment, we can ensure a more resilient and vibrant San Diego in the future, which will benefit all of us for decades to come.

Learn more about San Diego’s right recovery

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San Diego’s Economic Pulse: December 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 November 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.

Key Takeaways

  1. Unemployment falls to 6.6 percent.
  1. San Diego retailers gear up for holiday season by hiring 1,800 employees, but sales continue to suffer.
  1. Shop local this holiday season and wear a mask.

Labor Market Overview

The region’s unemployment rate was 6.6 percent in November, down from a revised 7.5 percent in October 2020, and still more than twice the year-ago estimate of 2.9 percent. Unemployment continues to increase in San Diego’s unincorporated and poorer areas, while falling in wealthier areas. The highest unemployment area in the region was Bostonia at 12.4 percent followed by National City at 10.3 percent, and the lowest was Solana Beach at 3.6 percent.

The region’s unemployment rate remains lower than California’s unemployment rate of 7.9 percent, but slightly higher than the national rate of 6.4 percent. While unemployment continues to fall, much of the improvement can be attributed to government support. In fact, unemployment claims increased again this week showing as emergency aid has dried up—proof the local job market could once again backtrack in the coming months.

Total nonfarm employment increased by 14,300 in November. Trade, transportation, and utilities accounted for the largest monthly gains, adding 8,200 jobs last month, primarily concentrated in retail trade (up 1,800 jobs). Even so, compared to a year ago, retail trade is still down 6,200 jobs. Professional and business services followed with an increase of 2,800 jobs. Job gains were driven by administrative and support services, which added 1,800 jobs. Food services and drinking places continue to struggle, shedding 1,000 jobs last month, even before the mandatory closures that took place in December.

Compared to a year ago, San Diego nonfarm employment remains down 97,700 jobs, or 6.4 percent. Leisure and hospitality represent the largest share, down 35,300 jobs. Accommodation is down 12,900 jobs over the year, and food services and drinking places are down 22,400.

Retail Sales Decline

November marked the beginning of the holiday shopping season as shown by an increase in retail employment in San Diego. However, nationwide retail sales numbers were gloomy. Retail sales were down 1.1 percent from October (seasonally adjusted), which was much worse than expected and likely impacted by increased COVID-19 infections and decreasing household income as expanded unemployment benefits expired. Without a stimulus relief package from Congress, retail sales declines will likely continue and perhaps become severe as millions lose unemployment benefits the day after Christmas.

Department store sales in the U.S. declined by 19 percent since this time last year and 7.7 percent since last month. Clothing and clothing accessories stores declined by 16.1 percent since last year and 6.8 percent since last month. Food service and drinking place stores declined by nearly one percent since last year and 4 percent since last month due to mandatory stay at home closures.

November’s retail sales were the worst since April, adding to the already growing list of signs that a slowdown in the recovery could be imminent. As San Diego’s retailers hire more employees for the holiday season, the call to shop local and safely becomes more necessary, especially given what appears to be a slowdown in consumer spending. Small businesses drive San Diego’s economy and create thriving neighborhoods. Check out some local favorites around the County.

 

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

EDC is here to help. You can use the button below to request our assistance with finding information, applying to relief programs, and more.

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San Diego’s Economic Pulse: October 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 September 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.

Key Takeaways

  1. Unemployment falls to 9.0 percent.
  1. Long-term unemployment continues to increase.
  1. Investments in workforce development and retraining become increasingly more important.

Labor Market Overview

The region’s unemployment rate was 9.0 percent in September down from a revised 9.5 percent in August 2020, and still three times above the year-ago estimate of 2.9 percent. Unemployment continues to increase in San Diego’s unincorporated and low income areas, while falling in wealthier areas. The highest unemployment area in the region was Bostonia at 16.5 percent and the lowest was Solana Beach at 5.0 percent.

The region’s unemployment rate remains lower than California’s unemployment rate of 10.8 percent, but higher than the national unemployment rate of 7.7 percent.

 

Looking at monthly employment, total nonfarm employment increased by 11,700 in September. Government accounted for the largest monthly gains, adding 6,800 jobs last month, primarily concentrated in local government education (up 5,300 jobs). Even so, compared to a year ago, local government education is still down 11,700 jobs. Leisure and hospitality followed with an increase of 2,500 jobs. Job gains were driven by accommodation and food services, which added 3,200 jobs. These gains were offset by a loss of 700 jobs in arts, entertainment, and recreation. Educational and health services increase this month, adding 2,400 jobs.

Compared to a year ago, San Diego nonfarm employment remains down 117,700 jobs, or 7.8 percent. Leisure and hospitality represents the largest share, down 52,400 jobs. Accommodation is down 14,000 jobs over the year, and bars and restaurants are down 24,400.

 

Long-Term Unemployment Continues to Increase

Long-term unemployment has increased substantially during the past few months of the pandemic, though it remains significantly lower than the peak experience in the Great Recession of 2007-2009. In September, the number of unemployed persons in the U.S. who were jobless for 27 weeks or more increased by 781,000 to 2.4 million. During the Great Recession, the highest rate of long-term unemployment was 6.8 million in April 2010.

Long-term joblessness can have a significant impact on workers’ future career prospects. If out of work long enough, skills become outdated. Moreover, long-term unemployed workers often face continual earnings losses, earnings volatility, and more frequent unemployment throughout their careers. Finally, long-term joblessness greatly increases the risk of workers leaving the workforce altogether, which can have lasting economic impacts.

Workforce development and retraining are becoming increasingly more important, especially as more workers face long-term unemployment. Jobs currently in high demand include software developers and software quality assurance analysts and testers, registered nurses, and retail salespersons and supervisors, which had the highest total job postings in September. While the hiring of retail might be a good sign, this may be due to the reopenings of stores and retail which will eventual level off. The top in-demand skills include merchandising, auditing, accounting, and selling techniques. Working to adjust these skills to the changing work environment is essential. Read more about workforce development and retraining, and how EDC is playing a part.

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

EDC is here to help. You can use the button below to request our assistance with finding information, applying to relief programs, and more.

Request EDC assistance

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San Diego’s Economic Pulse: September 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 August 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.

Key Takeaways

  1. Unemployment drops sharply to 9.9 percent; remains highest in the unincorporated parts of the County.
  1. Employment up in nearly all industries, up 20,500 jobs month over month.
  1. Low-wage job losses are nearly 30 times greater than high-wage job losses.

Unemployment Drops

The region’s unemployment rate was 9.9 percent in August down from a revised 12.4 percent in July 2020, and far above the year-ago estimate of 3.4 percent. Unemployment declined monthly as the region continues to reopen and jobs recover. San Diego’s unemployment rate remains lower than the state unemployment rate of 11.6 percent, but higher than the national unemployment rate of 8.5 percent.

Unemployment was highest in the unincorporated areas of Bostonia (17.9%), Bonita (14.7%), Spring Valley (13.6%), and in the cities of National City (13.7%) and El Cajon (13.6%), and lowest in the cities of Solana Beach (5.5%), Poway (6.8%), Coronado (6.8%), Del Mar (7.3%), and Encinitas (7.3%). Wealthier areas are enjoying lower rates of unemployment, while neighborhoods with a larger share of lower-paid workers suffer from higher rates of unemployment – elaborated on below.

Employment Bounces Back

Total nonfarm employment increased in August, up 20,500 jobs. This follows similar patterns to the state and national data. In California, nonfarm employment increased by 140,400 in August from the month prior, while payroll employment increased by 1.4 million in the U.S. during the same time period.

However, compared to a year ago, San Diego nonfarm employment remains down 135,800 jobs or 9 percent. In California, total nonfarm employment is down 1.6 million jobs, or 8 percent compared to a year ago, while the U.S. is down nearly 13 million jobs, or 8.8 percent.

Sector Employment Gradually Returning

Government accounted for the largest monthly gains, adding 6,800 jobs in August, primarily concentrated in local government education (up 4,300 jobs) after last month’s large decline. Compared to a year ago, local government education is still down 11,400 jobs.

Professional and business services followed with an increase of 5,300 jobs. Most of those job gains were in the administration and support services sector, which added 3,100 jobs to the region.

Construction employment increased this month, adding 3,100 jobs.

Trade, transportation, and utilities employment increased this month, adding 2,600 jobs. This was driven primarily by retail, which added 2,300 jobs.

Leisure and hospitality employment as a whole declined by 400 jobs in August. Encouragingly, however, restaurants added 700 jobs last month amid measured reopenings across the region.

Recovery Must Focus on Low-Wage Workers

Despite the gains observed in August, industry employment remains well below levels a year ago. The largest decline in employment has been in leisure and hospitality, which is down 60,100 jobs (shown in the chart above), or 29 percent since August 2019. Most of those leisure and hospitality job losses are concentrated in accommodation and food services, with a loss of 43,900 jobs. Trade, transportation, and utilities are down 17,100 jobs, with 11,700 of those jobs in retail. Government is down 15,400 jobs annually, with 14,000 local government jobs lost.

The lowest wages in San Diego County are concentrated in the sectors hardest hit by COVID-19: accommodation and food services, retail trade, arts, entertainment, and recreation, and educational services. Average wages for accommodation and food services are $30,560, retail trade are $41,785, arts, entertainment, and recreation are $45,040, and educational services are $49,826. Each sector hit hardest by COVID19 falls below the median regional wage of $73,596.

Layoffs in low-wage sectors have occurred at a rate much higher than those in high-wage sectors. According to Opportunity Insights, low wage jobs are down 31.8 percent. Meanwhile, high wage jobs are down only 1.8 percent.

Consumer spending has also suffered as wages continue to drop, especially for lower-wage employees. While low-wage workers hold less spending power, they spend more of their paychecks directly, rather than investments or savings. We can expect to see a larger proportion of spending come back into the economy as lower-paid employees get their jobs back, and ultimately advance to better paying positions over time.

Every previous economic recovery has increased systemic poverty and widened inequality. Too often in a rush to restore normalcy, entire segments of our community have been left further behind. The stakes could not be higher that we get this recovery right. We must rebuild an economy that is more resilient than before, so prosperity reaches more people. Read more about EDC’s recovery framework.

 

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

EDC is here to help. You can use the button below to request our assistance with finding information, applying to relief programs, and more.

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San Diego’s Economic Pulse: August 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 July 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.

Unemployment Slightly Lower

The region’s unemployment rate was 12.3 percent in July down from a revised 13.8 percent in June 2020, and far above the year-ago estimate of 3.6 percent. Unemployment declined monthly as the region continues to reopen and jobs recover. The region’s unemployment rate remains lower than the state unemployment rate of 13.7 percent, but higher than the national unemployment rate of 10.5 percent.

Unemployment was highest in the unincorporated areas of Bostonia (21.8%), Bonita (18.0%), Spring Valley (16.7%), and in the cities of National City (16.5%) and El Cajon (16.4%). Unemployment was lowest in the cities of Solana Beach (6.9%), Poway (8.6%), Coronado (9.1%), and Del Mar (9.1%). Areas with large Hispanic populations are facing higher rates of unemployment, as Hispanics are disproportionally employed in the most vulnerable occupations.

Employment Continues to Decline

Total nonfarm employment fell in July, down 2,200 jobs. This differs from state and national data. In California, nonfarm employment increased by 15,370 in July from the month prior, while payroll employment increased by 1.8 million in the U.S. during the same time period.

Compared to a year ago, San Diego nonfarm employment remains down 144,400 jobs, or 10.2 percent. In California, total nonfarm employment is down 1.6 million jobs, or 8 percent compared to a year ago, while the U.S. is down nearly 13 million jobs, or 8.8 percent.

Sector Employment Split on Gains

Government accounted for the largest monthly losses, losing 12,800 jobs in July, primarily concentrated in local government education (down 13,200 jobs) and state government education (down 500 jobs). Compared to a year ago, local government education is down 8,300 jobs, and state government education is down 4,900 jobs. Local government education employment is largely women occupied (70 percent). Job losses in local and state government education have the potential to set back women in the workforce, a trend already exasperated by the pandemic according to a United Nations report.

Construction followed with a decline of 1,100 jobs. Construction of buildings declined both monthly and annually, which is especially important as the region continues to grapple with a housing affordability crisis. Without construction jobs, home building stops. Home price growth continues to outpace incomes, as housing production is about half the rate necessary to keep up with job and population growth. Ensuring San Diego is an attractive and affordable place for talent and business is critical to maintaining its regional competitiveness.

Trade, transportation, and utilities employment increased this month, adding 6,100 jobs. This was driven primarily by retail, which added 4,200 jobs. Clothing and clothing accessories stores grew by nearly 13 percent in July. As California clarified social distance retail guidelines, many retail stores were able to reopen, leading to an increase in employment.

The leisure and hospitality industry gained back 100 jobs in July, but remains down 60,800 jobs compared to a year ago. Nearly 40 percent of leisure and hospitality industry employees are Hispanic. These jobs are not likely to return in large numbers while social distancing remains in effect.

A Long Road to Recovery

Industry employment remains well below pre-pandemic levels seen in February 2020. The largest decline in employment has been the leisure and hospitality industry, down 49,500 jobs, or 25 percent. Government employment is down 30,200 jobs, educational and health services is down 20,300 jobs, and trade, transportation, and utilities, which includes retail, has lost 18,000 jobs since February.

While some jobs have been recovered, many will be lost permanently. Creative training programs to get these workers employed in growing occupations will be key to our economic recovery. Furthermore, the pandemic has exacerbated the inequities that have long-plagued the region, particularly our Hispanic population. Developing an economic recovery strategy that promotes inclusive growth is essential to ensuring our future economic competitiveness.

 

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

EDC is here to help. You can use the button below to request our assistance with finding information, applying to relief programs, and more.

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San Diego’s Economic Pulse: July 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 June 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.

Unemployment Slightly Lower

The region’s unemployment rate was 13.9 percent in June down from a revised 15.2 percent in May 2020, and far above the year-ago estimate of 3.3 percent. The region’s unemployment rate remains lower than the state unemployment rate of 15.1 percent, but higher than the national unemployment rate of 11.2 percent during the same time period, respectively. Read more about EDC’s unemployment analysis.

Employment Continues to Recover

Between May 2020 and June 2020, total nonfarm employment in San Diego increased from a revised 1,301,700 to 1,355,700, a gain of 54,000 jobs. EDC’s COVID-19 survey of businesses shows that more than 60 percent of firms surveyed reduced their staff between March and May due to COVID19.The June employment numbers reflect jobs gradually returning to the region. This is consistent with state and national data. In California, nonfarm employment increased by 558,200 in June from the month prior, while payroll employment increased by 4.8 million in the U.S. during the same time period.

Compared to a year ago, San Diego nonfarm employment remains down 153,600 jobs or 10.2 percent. In California, total nonfarm employment is down 1.7 million jobs, or 10 percent compared to a year ago, while the U.S. is down nearly 13 million jobs, or 8.5 percent.

Sector Employment Slowly Returns

The leisure and hospitality industry accounted for the largest monthly gains, adding 34,700 jobs in June, primarily concentrated in food services and drinking places as restaurants reopened. While it is encouraging that the food services and drinking places sector has increased employment the last month, the industry still has 20 percent fewer jobs compared to a year ago. Tourism is still not close to recovered and likely will take much longer, the accommodation industry has 44 percent fewer jobs compared to a year ago.

Trade, transportation, and utilities employment increased this month, adding 9,500 jobs. This was driven primarily by retail, which added 6,800 jobs. Clothing and clothing accessories stores grew by nearly 49 percent in June. This aligns with national retail sales, which jumped 7.5 percent in June. The Census Bureau reported retail sales are 1.1 percent higher than their levels from a year ago, but those gains could be short-lived as infections begin to rise and closures continue.

Construction followed with an additional 4,100 positions, and educational and health services recovered 2,800 jobs lost between April and May. The bulk of job gains in educational and health services came from Ambulatory Health Care Services. The largest monthly employment decline was in government, with a loss of 3,900 jobs, as public finances continue to face revenue challenges.

Looking Ahead

While the employment report reveals solid monthly job gains, San Diego’s economy will likely face more job losses in the coming months. Just last week, the Governor announced more closures to retails and dining in. As industries close again, temporary layoffs are more likely to become permanent and the unemployment rate may rise again. Looking ahead, it is critical that workers have ample access to job training in order accelerate the economy’s recovery.

As educators plan for the upcoming school year, they are faced with unprecedented circumstances. San Diego Unified announced an online only fall learning plan, a first in the region. The lack of on-campus education will not only impact students and children with special needs, but also the working parents that depend on schools and daycare while at work. There are 180,000 households with two working adults and school-aged children. That means there are at least 360,000 workers in our region whose productivity or presence at work is being impacted while the virus remains a threat.

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

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San Diego’s Economic Pulse: June 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 May 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.

Unemployment Unchanged

The region’s unemployment rate was 15.0 percent in May, unchanged from a revised 15.0 percent in April, and far above the year-ago estimate of 2.8 percent. The region’s unemployment rate remains lower than the state unemployment rate of 15.9 percent, but higher than the national unemployment rate of 13.0 percent (not seasonally adjusted) during the same time period, respectively. Read more about EDC’s unemployment analysis.

Employment Bouncing Back

Between April 2020 and May 2020, total nonfarm employment in San Diego increased from a revised 1,290,800 to 1,309,000, a gain of 18,200 jobs. Overall, from February when the pandemic first began to May 2020, San Diego employment has declined by 205,500 jobs. In California, nonfarm employment decreased by 2.9 million in May from the month prior, and payroll employment increased by 2.5 million in the U.S. during the same time period.

Compared to a year ago, San Diego nonfarm employment declined by 195,800 jobs or 13.0 percent. In California, total nonfarm employment decreased by 2.3 million jobs, or 13.0 percent, from May 2019 to May 2020 compared to the U.S. annual loss of 17.7 million jobs, or 11.7 percent.

Sector Employment Slowly Returns

The leisure and hospitality industry accounted for the largest monthly gains, adding 7,900 jobs in May, primarily concentrated in food services and drinking places as restaurants began to reopen. While it is encouraging that the food services and drinking places sector has added jobs the last month, the industry has 40 percent fewer jobs compared to a year ago.

Educational and health services increased employment this month by 5,500 jobs, concentrated by 6,300 positions in health care and social assistance. Non-emergency health services added 5,800 of those positions, which accounts for roughly half of the jobs lost between March and April.

Construction followed with an additional 3,500 positions, and business/professional services recovered 2,500 of the 11,000 jobs lost between March and April. The bulk of the job gains in professional services came from administrative services, which includes temp help and employment services. This is particularly encouraging, as these types of jobs tend to become permanent over time and is an indicator of job growth in the relatively near future.

The accommodation industry continues to struggle with a monthly decline of 1,900 jobs, or 14 percent, in May. Accommodation industry employment has declined by nearly 64 percent from May 2019 to May 2020. While San Diego employment in accommodation is larger than many other regions, the job losses are in line with both San Francisco and Los Angeles Counties.

While job losses were not as extreme this month, clothing stores employment is about half its level from a year ago.

The largest monthly employment decline was in government, with a loss of 4,700 jobs, concentrated in state government — particularly state government education, which includes public colleges —and consistent with national trends.

As San Diego’s economy continues to reopen, current labor market trends provide a glimpse of the long-term effects on the economy. While some industries have brought back jobs, others are slower to recover. And while the May data brings some good news, it will take some time to recover from unprecedented levels of unemployment.

San Diego’s Economic Pulse: May 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 April 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.

Unemployment Skyrockets

The region’s unemployment rate was 15.0 percent in April, up from a revised 4.2 percent in March 2020, and above the year-ago estimate of 2.9 percent. During the 2009 recession, unemployment peaked at 11.1 percent in January 2010 and again in July 2010. The region’s unemployment rate remains lower than the state unemployment rate of 16.1 percent, but higher than the national unemployment rate of 14.4 percent during the same time period, respectively.

Employment Declines More than the Great Recession

Between March 2020 and April 2020, total nonfarm employment in San Diego decreased from 1,494,000 to 1,299,400, a loss of 195,000 jobs. For context, during the 2009 recession, the largest monthly non-seasonal job loss in San Diego was between June 2009 and July 2009, with 22,900 jobs lost, and the local economy lost a total of 119,000 jobs from Dec 2007 to Jan 2010. Put differently, more than 25 months of job losses occurred in San Diego in April alone because of COVID19. The month-over-month job losses are consistent with record-breaking state and national trends. In California, nonfarm employment decreased by 2.3 million in April from the month prior, and payroll employment declined by 20.5 million in the U.S. during the same time period.

According to the Bureau of Labor Statistics’ Current Population Survey, over 78 percent of all unemployed Americans in April reported being “on temporary layoff.” On the surface, this could mean that a sizable portion of those laid off will be able to get back to work in relatively short order. However, with many retail and food service businesses reopening at only partial capacity, the return to work may be longer than expected, and some who reported being on temporary layoff may ultimately be laid off permanently.

Compared to a year ago, San Diego nonfarm employment contracted by 199,200 jobs or 13.3 percent. In California, total nonfarm employment decreased by 2.3 million jobs, or 13.4 percent, from April 2019 to April 2020 compared to the U.S. annual loss of 19.4 million jobs, or 12.9 percent.

Sector Employment Suffers

Every one of San Diego’s 11 industry sectors lost jobs in April. Leisure and hospitality accounted for the lion’s share, shedding 96,200 payroll positions, or nearly 50 percent of its workforce. Within the leisure and hospitality sector, accommodation and food services lost 80,700 jobs, or 49 percent. California similarly saw widespread layoffs. Similar to San Diego, in California, leisure and hospitality posted the largest contraction at 866,200, which was more than double that of trade, transportation, and utilities, which gave up 388,700 payroll positions. This was also true nationally: job losses were spread across every industry, but cuts were especially severe in leisure & hospitality, which gave up some 7.7 million positions.

Retailers reduced employment by 20,300, or 14.3 percent in April, with the largest employment decreases in clothing and department stores. SANDAG estimates a potential loss of taxable retail sales of 53 percent in May, assuming a 3-month disruption from COVID19. This implies more retail job cuts could be on the way in the May employment report.

Understanding the ongoing economic damage caused by COVID19 can be daunting, as the numbers involved are often so far out of scale with the rest of historical data that it is difficult to even contextualize what they mean. Overall, COVID19 has accelerated unemployment and job losses at a level unheard of.