San Diego’s unemployment rate hit a level in July not seen since 2021 with losses in construction and professional services, as well as sluggish growth in other sectors.
The region’s unemployment rate was 5.2%, state labor officials said Friday, up from 4.9% the previous month. It marks the highest unemployment rate in San Diego County since September 2021.
San Diego isn’t alone in rising jobless numbers, with the nationwide rate up in July to 4.6%, and in California to 6.1%. National job numbers were bad enough that President Donald Trump fired the head of the U.S. Bureau of Labor Statistics, worrying experts. California’s Employment Development Department does use federal data but also conducts its own surveys and analysis.
A large part of San Diego’s July report can be chalked up to seasonality, with almost all job losses — 17,200 — to teachers off for summer break. Still, other sectors were down from June to July: Construction shed 400 positions, and there were 900 job cuts in professional and business services, which includes work in legal, scientific, waste management and architectural fields.
When adjusted for seasonality, the San Diego County unemployment rate was closer to 4.8%, said Daniel Enemark, chief economist at the San Diego Regional Policy & Innovation Center. That compares with the 4.2% U.S. average and 5.5% in California.
“The seasonally adjusted rate has increased every month since March,” Enemark said. “June and July usually see unemployment increase in San Diego, but this June was the worst surge on record, and this July was worse than average as well.”
One sector that has clearly seen a shift is professional and business services, shedding 6,800 jobs, the most of any category, over the 12 months. Most of the losses have been in tech and biotech.
Kevin Carroll, executive director of technology industry trade group Tech San Diego, said there has been a drastic slowdown in hiring. He said part of the loss can be attributed to jobs, like software development, where some of the work can be done by artificial intelligence.
“It is a much tougher environment for a STEM (science, technology, engineering and mathematics) grad to find a position than it was 12 months ago,” Carroll said. “Some of that is due to AI. Entry-level jobs for software development are increasingly difficult to secure for new graduates.”
San Diego County’s labor force — adults who either have a job or are actively looking for one — was 1.67 million in July, up 1% in a year. That’s not a big change and points to the possibility of people leaving the region in the past few months. For example, San Diego’s labor force hit a high of 1.69 million adults in March.
It’s been a rough week for San Diego economic reports. Data released Tuesday showed San Diego County had the highest inflation rate in the nation at 4%, its highest level since 2023.
Chris Thornberg, economist and founding partner of Beacon Economics, said there is an economic slowdown across the U.S. and San Diegans shouldn’t be overly concerned that it is somehow much worse here. He also argued that local data tends to be more volatile and future revisions may lessen the harsher numbers.
“San Diego is feeling the effects the same as everyone else,” Thornberg said.
He said where California may be at a disadvantage is a higher minimum wage, which he said is increasing unemployment among 16 to 19 year olds.
“When minimum wage is high,” he said, “employers don’t hire kids.”
On an annual basis, San Diego County has added more than 6,000 jobs, with almost all positions coming from two categories. Private education and health services (nursing, social assistance, private schools and universities) added 14,400 jobs, and government (mainly education) added 6,500 jobs. Other gains were in the services category (laundry, maintenance, religious) with 800, and leisure and hospitality (jobs in hotels, casinos, restaurants and bars) with 400 new jobs.
Every other sector lost jobs. In addition to the nearly 7,000 jobs lost in professional and business services, other losses were in manufacturing, down 3,800; financial activities (real estate, insurance, investments), down 2,000 jobs; construction down by 1,300; and information (telecommunications, newspapers, publishing industry), down by 1,000.
The position with the most job openings in July in San Diego County was retail salespersons, with 1,579 ads, according to state data that aggregates job postings during the month. It was followed by registered nurses, with 1,490 ads; computer occupations, with 896; and home health and personal care aides, with 857.
Employers with the most job ads were UC San Diego, Sharp Healthcare, Qualcomm, Scripps Health, Starbucks, General Atomics and Apple.
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 5.2%.
The rate was 6.4% in Los Angeles County, 4.8% in Orange County, 4.4% in San Francisco County, 4.8% in Santa Clara County, 6.1% in Santa Cruz County and 6.5% in Riverside County.
Originally Published: August 15, 2025 at 12:30 PM PDT