San Diego County unemployment rate closed in on pre-recession levels in February, dropping to a nearly seven-year low of 5.3 percent.
The rate, which has fallen nearly 2 percentage points over the last year, is indicative of a job market that is boasting broad-based hiring, from the high-paying professional, scientific and technical services to leisure and tourism.
Every major sector in the county added workers over the last 12 months, as employers added 39,700 people to payrolls, the state Employment Development Department reported Friday. Economists described the 3 percent annual growth as healthy.
“San Diego scored another impressive win in its job market during February,” said Lynn Reaser, chief economist at Point Loma Nazarene University. “Year-over-year job increases were also widespread, embracing every major sector from construction and manufacturing to tourism and government.”
The county’s unemployment rate fell from 5.8 percent in January, and was last at this level in March 2008. The region’s pre-recession low unemployment, in July 2007, was 4.9 percent.
While the job growth has picked up, wage increases are still lagging. The Bureau of Labor Statistics reported this week that average pay in San Diego County is rising 0.8 percent annually, well below inflation and the slowest of the nation’s 10 largest counties.
Alan Gin, economist at the University of San Diego, said wages should start to increase more substantially when the unemployment rate falls below 5 percent, something he sees happening by the end of the year.
“The labor market will tighten up,” he said. “Employers will have more difficulty finding workers and so they’re going to have to offer higher wages to entice people to work there.”
Despite the solid job growth, San Diego County no longer leads the pack in the speed of hiring. After pacing Southern California, the state and the nation last year, San Diego’s annual 3 percent job growth clip now trails Orange County, the Inland Empire, and the state of California. The county still is ahead of Los Angeles and the nation as a whole.
Esmael Adibi, economist at Chapman University, said that was not a cause for concern, pointing out that other regions are essentially catching up with San Diego.
“This is a healthy report,” Adibi said. “It shows basically that job creation, based on what we got from last year, is gaining momentum.”
Adibi stressed that the annual job gains are broad-based, with the science industry hiring value-added positions, and the tourism industry creating jobs for those who wouldn’t qualify for high-paying positions. Professional, scientific and technical service employment was up 6.4 percent over the year, or 8,100 workers, while tourism employment rose 4.9 percent, adding 8,200 people to payrolls.
“It’s true we want high-value-added jobs but at the same time we’re seeing job growth in education, health, leisure and hospitality, and even government and that’s good,” Adibi said.
The financial activities sector was up by 1,400 employees, or 2 percent, as declining interest rates created more demand for refinancing. Construction employment increased 3,200 jobs over the year, or 5.2 percent. Government employment was up 4,000 jobs, or 1.7 percent.
In February 2014, the county’s unemployment rate was 7.1 percent. It fell to 5.3 percent over the year for reasons economists like to see: the labor force rose 0.6 percent to 1.55 million, while the number of people on a payroll or self-employed rose 2.5 percent to 1.47 million. In February, there were 83,000 unemployed San Diegans, down 24.3 percent from a year earlier.
“Overall, San Diego has begun 2015 on a strong note and the region appears well positioned for further gains,” Reaser said.
The monthly numbers, which are influenced by seasonality, are a little more mixed. From January to February, employers added 6,200 people to payrolls. In that time, local government education added 1,600 workers, as generally happens this time of year, according to a state news release. Leisure and hospitality hired 1,200 people, while financial activities rose by 900. Construction employment declined by 400 workers and trade, transportation, and utilities fell by 100.
Adjusted for seasonal factors, Reaser said San Diego County’s unemployment rate was 5.2 percent in February, down from 6.2 percent in January. The state reports that employment rose by 1,000 jobs over the month when adjusted for seasonality.
San Diego County’s only sector not to record a gain in employment over the year was mining and lodging, which remained flat at 400 workers.
Statewide, California’s unemployment rate fell to a seasonally adjusted 6.7 percent in February. The state added 29,400 jobs in February for a total gain of 1.8 million positions since the economic recovery began in February 2010. The last time the unemployment rate was 6.7 percent was June 2008.
Eight categories added jobs in February, with leisure and hospitality posting the largest increase over the month, adding 12,600 jobs. The overall number of people who are unemployed also fell by 42,000 and is now less than 1.3 million. January’s unemployment rate was revised to 7 percent. The national unemployment rate also decreased last month to 5.5 percent.
