San Diego continues to add jobs at a faster pace than the state, but the region is showing signs of a hiring slowdown in some key industries such as construction and retail.
San Diego County posted an unemployment rate of 3.5 percent in February – identical to this time last year, according to statistics released Friday by the California Employment Development Department. In January, the jobless rate in San Diego County was 3.8 percent.
Local employers added 19,900 jobs year over year – led by education, health care, professional/business services, tourism, government and manufacturing.
While job growth remains healthy, the pace lags the rapid growth seen last summer and fall, when annual employment gains came in at 25,000 or more.
“It looks pretty good, but job growth is kind of slow,” said Alan Gin, associate professor of economics at the University of San Diego. “Total non-farm (employment) year over year is up less than 20,000. That is less than we have been seeing recently.”
The slowdown doesn’t necessarily signal a softening economy, said Gin. It might mean there’s a shortage of applicants.
“With unemployment at 3.5 percent, that means we are at full employment,” he said. “The labor market is really tight right now.”
As of February, retail trade shed 3,500 jobs over the past year, and construction employment was flat. Financial jobs, which are often tied to real estate, declined by 700.
“Retail is showing some weakness,” said Kelly Cunningham, head of the San Diego Institute for Economic Research. “That is usually an indicator that people aren’t spending money. But retail is also impacted by Amazon and online shopping, so it is hard to say exactly what is going on.”
While job growth in construction has been stagnant year over year, contractors did add 2,400 jobs in San Diego County between January and February – perhaps signaling the start of a seasonal rebound.
Cunningham noted, however, that construction is linked to the number of building permits issued. According to the California Department of Housing and Community Development, the San Diego region issued fewer building permits in 2018 than the year before. Construction hiring also may be suffering from the run-up in housing prices over the past few years, which hamstrings demand by making it more difficult for buyers to afford a home, said Cunningham.
Kyle Houston, a San Diego metro market manager for job placement firm Robert Half, said demand remains high for workers in many fields, such as technology and professional services.
“It is just very difficult to find people in San Diego,” he said. “I think we are at a point where we are trying to get people off the sidelines and into the labor force. The people who are actively seeking jobs at this point are finding employment.”
In a recent Robert Half survey on the skills gap, 72 percent of San Diego employees said they have been offered a position where they were underqualified – a signal that local employers are more willing these days to train workers on the job. Nationwide, 42 percent of workers surveyed said they were offered a job for which they were underqualified.
In a separate Robert Half survey, San Diego ranked second highest among 28 U.S. cities for worker confidence when negotiating salaries.
Local professions adding the most workers in the past year include professional and business services, which includes many technology jobs, at 5,400 jobs; tourism with 3,800 workers; health care at 3,500 jobs; and education at 3,400. Government added 3,400 workers and manufacturing gained 2,700.
“The technology space is going to continue to grow,” said Houston. “We have all read the news articles about Apple, Amazon, Teradata, Wal-Mart e-commerce and all these big tech companies coming to town, and I think that is going to facilitate growth in all markets.”
For California, the jobless rate in February was 4.4 percent on an unadjusted basis. It was 4.1 percent in the U.S.
The nationwide unemployment rate was 3.8 percent. Seasonally adjusted employment figures were not currently available for San Diego County.
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