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Total San Diego employment dropped between May and June — but the decline was caused by the mass dismissal of temporary US Census workers who had previously been swelling the ranks of the employed. 

We looked at this topic last month and determined that while May employment was indeed goosed by temporary census hiring, job growth was still positive even after backing out the census workers.

In June, this process went into reverse as census workers were laid off.  Overall June employment declined as a result, but the non-census sectors of the economy actually grew.

The following chart of San Diego employment over the past several years shows my estimate of the effect of census hiring in recent months.  The dotted blue line represents estimated non-census employment while the solid blue line shows all employment including the census workers.  The temporary census-driven blip up and back down in May and June is clear.

As an aside, a couple of readers have expressed puzzlement at the big drops between December of each year and the January of the following year on the chart above.  The December-to-January decline each year results from seasonal holiday workers being laid off, similar to what happened with the census employees in June.  Employment also reliably drops between June and July of each year.  I haven’t looked into the reason, but I assume it is related to schools closing down for the summer.

Back to June.  The seasonal effects describe in the prior paragraph can be smoothed out by looking at year-over-year changes in employment.  That measure is still negative, meaning that more San Diegans were employed in June 2009 than in June 2010, but it has been consistently creeping toward positive territory since late 2009.

Once census distortions are removed, San Diego job growth is revealed to have been on a five-month winning streak.  This should end next month as the annual July job downdraft hits.  But this won’t be a negative by itself as it’s par for the course in July even during economic expansions.  The more informative tell will be the magnitude of the decline compared to recent years.  An unusually mild July drop in employment would indicate that the job market recovery is still on track.

— RICH TOSCANO

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