San Diego’s Unemployment Held Steady in March, Not Yet Reflecting Federal Headwinds 

Policy & Innovation Center chief economist analyzes new data on unemployment rates 

SAN DIEGO (April 25, 2025) — San Diego County’s unemployment rate remained essentially unchanged last month — holding steady at 4.3% in March 2025 — according to new data released by the California Employment Development Department. Policy & Innovation Center (PIC) Chief Economist Dr. Daniel Enemark noted the difference from February to March is less than three hundredths of a percentage point, a minimal difference despite some swings in employment by industry.  

Construction lost 1,400 jobs while leisure and hospitality added 1,500 jobs. State and local government added 2,400 jobs — mostly education jobs in public secondary schools, colleges and universities. Federal government employment saw no change, but the data may not yet reflect DOGE cuts to the federal workforce, because many of the 280,000 layoffs were held up in court battles, opposed by Congress, or made in error. And the 75,000 workers who took “buyouts” will remain employed through September. 

The most important development in this data release was the increase in the size of the labor force. About 14,000 people joined the labor force, increasing the pool of workers by nearly 1%. The labor force usually grows this time of year, and last month saw the largest March increase on record. While a 1% rise in the labor force may sound small, less than 5% of workers are unemployed, so growing the labor force even by just a percent is a significant increase in talent available for the region’s businesses. 

Unfortunately, these positive numbers do not mean the labor market is necessarily healthy.  

The data does not reflect DOGE’s federal job cuts or the fallout from Trump’s tariffs. The dramatic losses in the stock market reflect a belief among investors that the long-run profitability of US companies will be negatively impacted by tariffs.  

Beyond investors, economists’ predictions have also shifted in a negative direction since January. 

The Wall Street Journal Economic Forecasting Survey collects predictions from about 75 economists from banks, universities, and other institutions every quarter. Between the last two surveys (in January and April) the median projection for unemployment by the end of 2025 rose from 4.3% to 4.6%, while the median projection for year-end inflation rose from 2.6% to 3.5% and the predicted likelihood of recession grew by 65%.  

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.