‘Weakening of the economy’: San Diego unemployment at 5%

San Diego County’s unemployment rate fell in August as teachers returned to the classroom, but still remained at one its highest levels in four years.

The region’s unemployment rate was 5%, state labor officials said Friday, down from 5.2% the previous month. That was higher than the nationwide average of 4.5% but lower than California’s average of 5.8%.

Education hiring led the charge in August with roughly 3,000 jobs added across private and public schools. Tourism also saw growth, adding 1,100 positions. The rest of San Diego County’s industries from July to August had a rougher outlook. In particular, the high-paying professional and business services sector (legal, scientific, waste management, architectural) shed 1,500 jobs.

Other sectors to lose jobs were financial activities (real estate, insurance, investments), down by 500 jobs; manufacturing, down by 300; and construction, also down by 300.

“What you’re seeing is a weakening of the economy,” said San Diego economist Ray Major.

He said many employers are likely holding out on hiring until the full effects of President Donald Trump’s tariffs are known, and how much borrowing costs (in terms of interest rates) will change after the Federal Reserve cut rates by a quarter percentage point this week.

San Diego County’s labor force — adults who either have a job or are actively looking for one — was 1.68 million in July, up 1.7% in a year. That’s only 3,800 people short of the peak of 1.69 million reached in March.

Major cautioned that labor force numbers tend to be volatile month to month. He said the long-term trend does seem to be heading toward a bigger labor force, but there could still be a negative aspect: Older workers coming out of retirement because they aren’t making ends meet.

When adjusted for seasonal swings, San Diego County’s unemployment rate was closer to 4.6%, according to Beacon Economics. That compares to the 4.3% U.S. average and 5.5% in California.

On an annual basis, San Diego County’s biggest growth was in private education and health services (nursing, social assistance, private schools and universities), which added 12,500 jobs. It was followed by government with 7,400 jobs (mainly education); and leisure and hospitality added 1,500 new positions (tourism-related work in hotels, casinos, bars and restaurants).

The San Diego City Council passed an ordinance this week raising minimum wages for most tourism workers to $25 an hour over the next four years. It will be phased in and not start until next summer, so it will take time before it has any effect, or lack of effect, on hiring.

Over the past year, several sectors shed jobs. The biggest was professional and business services, down by 7,000 positions. It was followed by manufacturing, down by 2,800 jobs; financial activities (real estate, insurance, investments), down 2,100; information (telecommunications, newspapers, publishing industry), down 1,100; trade, transportation and utilities (mainly retail), down 900; and construction, down by 700.

The position with the most job openings in July in San Diego County was retail salespersons, with 1,648 ads, according to state data that aggregates job postings during the month. It was followed by registered nurses, with 1,371 ads; first-line supervisors of retail sales workers with 917; and home health and personal care aides with 715.

Employers with the most job ads were UC San Diego, Scripps Health, Sharp Healthcare, General Atomics, Starbucks and Qualcomm.

State officials do not seasonally adjust jobless rates for individual counties. Compared with other parts of California, San Diego County was near the high end with its unadjusted rate of 5%.

The rate was 6.3% in Los Angeles County, 4.6% in Orange County, 4.3% in San Francisco County, 4.6% in Santa Clara County, 5.6% in Santa Cruz County and 6.3% in Riverside County.