Labor Force Shrinks as Developers Bet on Downtown
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San Diego County's July unemployment rate rose to 4.7 percent — tied for the year's highest reading — up from a revised 4.5 percent in June. On a seasonally adjusted basis the figure is a somewhat calmer 4.3 percent, but the unadjusted number reflects real labor market pressure. More striking is the regional labor force figure: it fell to 1.63 million workers, the lowest level in three years and nearly 50,000 below the March 2025 record. A shrinking labor force in a high-cost region signals not just unemployment but workers leaving entirely — through retirement, out-migration, or discouragement.
Monthly job losses were spread across sectors: government employment fell 17,600 from June to July, largely reflecting educators off during summer, which is seasonal and expected. Smaller but structurally notable declines hit professional and business services, private education and health, and leisure and hospitality. On housing, the median sale price for the three months ending in June was $984,000, with prices essentially flat year-over-year — up just 0.07 percent — a sharp deceleration from earlier growth rates.
Against that backdrop, two downtown development announcements signal continued investor confidence. Cresleigh Homes is reportedly planning a 37-story residential tower in the downtown core — among the tallest in the city if completed. Separately, a 102-year-old building formerly used as a Wonder Bread facility is slated for revitalization as a Live Nation music venue, an entertainment anchor that proponents argue could generate nighttime foot traffic downtown currently lacking when offices empty. In the life-science sector, Khartis Therapeutics closed a $50 million Series B and Craif established a $33 million R&D fund in San Diego — early-stage funding activity that continues even as lab-space vacancy in the region sits around 26 percent. San Diego State University set a new enrollment-application record this cycle, surpassing 124,000 applications, according to KPBS reporting from August 21.