San Diego’s Unemployment Slightly Increased Despite Hospitality’s Typical Hiring Boost
Policy & Innovation Center chief economist analyzes new data on unemployment rates
SAN DIEGO (June 23, 2025) — San Diego County’s unemployment rate inched upward last month, according to new data released by the California Employment Development Department. The rate rose from 4.5% in April to 4.6% in May, following several months of stability at 4.3%, said Dr. Daniel Enemark, chief economist at Policy & Innovation Center (PIC).
According to Dr. Enemark, the County’s seasonally adjusted unemployment rate increased despite the unadjusted rate going down because employment grew slower this Spring than it has in April and May over the past 10 years.
A typical Spring over the last 15 years would see unadjusted unemployment decreasing by 0.6 percentage points in April and May; this year it went down by just 0.2 points. By contrast, June is often a difficult month for San Diego County’s labor market, with unemployment increasing by about half a percentage point, so unemployment may go up when this month’s data is released in July.
Phil Blair, executive officer of Manpower San Diego, described a stalled labor market: “Hiring is slow but we aren’t seeing many layoffs either. In many sectors, employers are waiting to see what happens with tariffs before investing in new talent or shedding workers. Trump says his tariffs will make dolls more expensive but kids will make do with two dolls instead of 30. The problem is that employers won’t need as many workers if consumers are buying less.”
Blair says this dynamic also explains why healthcare is one of the better-performing sectors right now: “Demand for healthcare doesn’t change much with prices. An outpatient care center will have just as many patients regardless of the price of hot-rolled steel.”
The hardest-hit sectors this month were Professional, Scientific, and Technical Services (1,300 jobs lost); manufacturing (400); and civilian federal government (300). Dr. Enemark noted the federal job losses may not incorporate layoffs from the “Department of Government Efficiency.” Roughly 770,000 federal positions were impacted through buyouts, with many employees remaining on payroll through September.
By contrast, leisure and hospitality gained 3,400 jobs, showing its usual early-summer surge. Healthcare and social assistance grew by another 1,700 jobs, mostly from ambulatory health care services, after adding 2,200 in April.
Leisure and hospitality reached 207,000 jobs in May. With three months until the sector’s typical August peak, there’s a good chance it will finally surpass its pre-pandemic high of 208,800 jobs – marking the end of a difficult five-year recovery.
About Policy & Innovation Center
The Policy & Innovation Center is a think tank and social-impact incubator. PIC conducts research and policy analysis to identify creative solutions to our communities’ biggest problems, and builds cross-sector, multijurisdictional partnerships to advance those solutions. Founding partners include The Brookings Institution, County of San Diego, and San Diego Foundation. For more information, visit thinkpic.org.