Santa Rosa's unemployment falls to 4.3% amid steady GDP growth and wage increases

The City of Santa Rosa Economic Development Subcommittee convened on March 11, 2025, to discuss key economic indicators and trends affecting the local economy. The meeting highlighted the city's unemployment rate, job growth sectors, wage changes, and commercial real estate trends.

As of the end of 2024, Santa Rosa's unemployment rate was reported at 4.3%, which is above the national average of 3.9% but below California's state average of 5.4%. The most significant job growth was observed in the education, health services, financial activities, and government sectors. However, the technology and manufacturing sectors experienced notable declines.

The meeting also addressed changes in wage levels, primarily attributed to a minimum wage increase to $17.87 per hour effective February 2025. The average hourly wage across all industries in Santa Rosa rose to over $33.60. Consumer spending increased by approximately 14% in areas such as healthcare, food, transportation, and housing, indicating a dynamic labor market.

Looking ahead, Sonoma County is projected to see GDP growth in 2025, with a 2.8% average increase since February 2020, signaling a recovery from the impacts of COVID-19. Despite inflationary pressures, economic indicators such as unemployment and GDP are expected to show steady improvement.

The subcommittee also reviewed regional unemployment rates, noting that surrounding communities had higher rates than Sonoma County, which is a positive sign for local economic stability. The team is monitoring median incomes to understand consumer behavior and its impact on business recruitment efforts.

In terms of commercial real estate, the retail sector's vacancy rate stood at 5.6%, higher than the regional average of 4%. The office sector faced a vacancy rate of nearly 7%, reflecting ongoing challenges due to remote work trends. The industrial sector reported a concerning vacancy rate of 70.5%, significantly higher than the regional average of just over 5%.

The meeting concluded with discussions on initiatives to address high vacancy rates, including a vacant reactivation program aimed at revitalizing unused commercial spaces. The subcommittee plans to continue monitoring these trends and develop strategies to enhance economic growth in Santa Rosa.