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The number of people employed in San Diego County increased half a percent between September and October, according to the Employment Development Department’s latest estimates:

This increase of 5,600 jobs represents the first noticeably positive showing since June, after which employment dropped sharply for the month (due mostly to seasonal factors) and then stagnated in August and September. 

That’s one way of looking at it.  The problem is that month-to-month changes in employment can be deceiving due to the influence of seasonal factors.  For instance, employment typically rises into the end of the year and then declines sharply each January.  And as noted in the prior paragraph, employment always drops in July, mostly as a result of schools going into summer break.

To solve this problem, the EDD tabulates seasonally-adjusted job data, which attempts to back out the seasonal influences on the employment trends.  (My thanks go to the always-helpful local economist Kelly Cunningham for pointing me at this data set).  Here’s a look at the seasonally adjusted data over the same time period as above:

Removing the seasonal zigs and zags really makes it clear how truly brutal the job decline was for roughly a year starting in October 2008.  Thankfully, the bloodletting slowed in late 2009 and by early 2010, employment was increasing again.

This increase made for a substantial improvement over the freefall-like conditions that had prevailed previously, but in absolute terms job growth was still quite weak.  And even that didn’t last.  Seasonally adjusted employment has been drifting generally downward for months, posting small decline in October.  This means that while more people were employed in the real world, all of this additional employment (and then some) is likely explained by seasonal effects rather than underlying strength in the job market.

It will be interesting to watch the seasonally adjusted numbers in November and December, when employment typically rises as a result of seasonal hiring.  Of course, much of that usual hiring takes place in the retail industry, where employment should not be expected to regain its former glory any time soon.  As a result, seasonally adjusted employment could continue to look weak.

On a lighter note, that portion of the private sector economy that was not highly leveraged to the housing bubble managed to post another year-over-year increase:

There are really two different downturns going on here.  The part of the economy that was not directly dependent on the over-building, over-buying, over-borrowing, and over-consuming engendered by the housing bubble has suffered through a severe business cycle recession.  The bubble-dependent sectors, in contrast, had gotten far bigger than they ever should have and have been more or less permanently cut down to size in proportion to the rest of the economy.  The bubble jobs aren’t coming back.  But many of the non-bubble jobs are.  The positive year-over-year growth for the non-bubble private sector indicates that perhaps that this crucial part of the economy is on the mend.

Please contact Rich Toscano at rtoscano@pcasd.com and follow him on Twitter at http://twitter.com/richtoscano.

Rich Toscano

Rich Toscano has been observing the housing market for Voice of San Diego, with the occasional prolonged absence, since 2006. Follow him on Twitter at...

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