Unemployment Rate Jumps to 7-Year High

If the local economy is in a recovery mode, you wouldn’t know it by the latest unemployment figures: San Diego County joblessness rose in June to 7.1%, the highest level here in more than seven years.

The June jobless rate, a significant jump from May’s 6.4% and the June, 1990, rate of 4.4%, is a symptom of an economic downturn that was exacerbated by the Persian Gulf War, observers said Monday. To place it in perspective, San Diego’s unemployment in June was lower than the statewide 8.0% rate but higher than the 6.9% nationwide rate for June.

Unemployment figures often jump in the month of June because legions of students and college graduates enter the work force for the first time, according to labor market analyst Jack Nowell of the state Employment Development Department. Nevertheless, the increase was higher than Nowell expected.

“It’s alarming any time the unemployment rate goes up. That’s very worrisome. This is anything but normal,” Nowell said.

Total jobs in the region have also declined, another bad economic sign. Non-agricultural wage and salaried jobs in the county totaled 995,000 in June, down 7,200 from the June, 1990, total of 1,002,200.

Joseph A. Wahed, senior vice president and chief economist at Wells Fargo Bank said the higher jobless rate shows that the San Diego economy “has taken a few hits.”

“Flatness in job creation is a sign of how bad the economy is,” Wahed said. “I am astonished that retail sales numbers in San Diego are 6.7% weaker than last year. Tourism is down, and there has been a slowdown in income gains among people living in San Diego.”

Max Schetter, director of the Economic Research Bureau of the Greater San Diego Chamber of Commerce, said the high jobless rate should be taken with some caution because of the potential for month-to-month statistical inaccuracies. Nevertheless, the local jobless rate this year has been higher than forecast, he said.

The high rate “gets your attention and makes you wonder,” Schetter said. “The indicators for the nation seem to be that we are recovering from the recession but at a slow rate. There is really no clear signal whether we have turned the corner or are bumping along the bottom.” The June unemployment rate was the highest monthly reading in San Diego County since January, 1984, when it reached 7.4%, and the highest June rate since 1983, when unemployment hit 8.9% of the work force, Nowell said.

Unemployment Rates California Janurary, 1990: 5.5% June, 1991: 8% San Diego County Janurary, 1990: 3.8% June, 1991: 7.1% Source: California Employment Development Department