Job growth stalls in August

September 20, 2013

Employment growth stalled in San Diego County in August as the impacts of the federal budget sequester began to be felt at local factories and government offices, according to data released Friday by the state Employment Development Department.

After adjusting for seasonal fluctuations, there was zero net job growth in August.

Although there were hundreds of new jobs for architects, engineers, temporary workers and building maintenance workers, those gains were totally offset by cutbacks in the federal government and durable goods manufacturers.

Four-hundred federal workers were axed in August, bringing the 12-month total of job cuts to 1,000. Durable goods manufacturers cut 300 workers last month, for an annual total of 2,700.

Despite the hiring stall, the jobless rate dropped from 7.8 percent in July to 7.4 percent in August, but the reason for that decline is that fewer people were actively seeking jobs and were dropped from the unemployment tally.

After seasonal adjustments, the improvement was much smaller, inching down from 7.4 percent in July to 7.2 percent in August, according to Lynn Reaser, economist at Point Loma Nazarene University.

"San Diego's job market has lost some momentum during the past few months…," Reaser said. "San Diego's economy continues to expand, but the region continues to face various hurdles. These include cuts in military spending and reductions in federal grants for scientific and medical research."

Reaser said rising oil prices and concerns about healthcare prices may also have had a role. But economists say the federal cutbacks have a disproportionate impact on San Diego County because of its heavy concentration of military contractors.

The county's annualized job growth rate, which led the state and nation through much of the recovery, has now slipped behind both.

By Dean Calbreath, The Daily Transcript