Local Unemployment Climbs to 8.3% in August as Broader Stress Signs Emerge

If July was a warning sign, August is a wake-up call.

Greater Palm Springs’ unemployment rate rose again in August, hitting 8.3%, up from 7.9% in July and 7.6% a year ago. According to the California Employment Development Department, the valley’s jobless rate now sits 2.0 points above Riverside County (6.3%) and 2.5 points above California (5.8%). It’s the highest August reading in recent years, signaling that this is not just summer softness, but structural strain.

The valley added some workers to the labor force, roughly 3,000 more than in July, but nearly 1,600 more are now unemployed, pushing the overall number of job seekers to 16,300, a substantial increase from 14,700 last month.

The August Data: What Changed

Worsening vs. Last Year: Seven of nine cities experienced higher unemployment rates compared to August 2024. The total regional rate rose 0.7 points year over year, while Riverside County and California both ticked up just 0.1 to 0.2 points.

Month-over-Month Increases: Valley-wide unemployment jumped 0.4 points from July. For comparison, Riverside County’s rate fell by 0.2 points, and California’s dropped by 0.3 points—making the local trend even more concerning.

By the Numbers: City-Level Highlights

 

• Coachella had the highest unemployment in the region at 12.5%, surging from 10.9% in July and reversing a small improvement seen last year.
• Rancho Mirage remains in double digits but was one of only two cities not to worsen month-to-month.
• Palm Desert and La Quinta, both tourism- and retail-heavy, saw their rates hold steady but remain significantly higher than last year.

Key Takeaways for Decision-Makers

1. Labor Force Growing, But So Is Unemployment

The valley added more people to the labor pool (+3,000 from July), indicating an increase in job seekers. However, the number of unemployed rose even faster, indicating a lack of job absorption rather than just seasonal patterns.

2. Widening Gap with County and State

• Greater Palm Springs: 8.3%
• Riverside County: 6.3%
• California: 5.8%

The 2.0-point gap with the county is the largest in over a year. It reflects deeper local weakness—possibly in hospitality, retail, and construction sectors—not mirrored elsewhere in the state.

3. Persistent Hot Spots

• Coachella’s return to 12.5% is troubling and likely tied to uneven economic recovery and limited job availability in the East Valley.
• Rancho Mirage, despite its small size, continues to signal stress, with 10.0% unemployment for the second consecutive month.

4. No Clear Seasonal Rebound Yet

Typically, the August numbers begin to show signs of stabilization before fall hiring picks up. This year, that rebound is absent, a sign that deeper issues may be forming under the surface.

Broader Context: What National Signals Mean for the Valley

The August U.S. jobs report showed just 22,000 new jobs added nationwide, the weakest print since early 2021. Wage growth slowed, federal layoffs continued, and sectors like manufacturing and retail remained under pressure.

For Greater Palm Springs, the national slowdown raises several flags:

• Tourism demand may weaken further as national wage growth slows.
• Hiring delays in hospitality and local retail could extend into fall if businesses remain uncertain.
• Federal job cuts and constrained grant funding may reduce activity in government-adjacent sectors.
• Rising unemployment claims suggest re-employment is taking longer, meaning laid-off workers here may struggle more to bounce back.

Silver Linings (Yes, They Exist)

Despite the negative headline, a few positive notes remain:

• Indian Wells and Rancho Mirage improved or stayed flat month-to-month.
• Healthcare and education, which anchor parts of the valley’s workforce, continue to grow in California and nationally.
• Interest rates may fall soon. If the Fed begins rate cuts this fall, financing for projects, from hotels to infrastructure, could ease up, nudging hiring forward.

Bottom Line

August’s 8.3% unemployment rate confirms what July suggested: this isn’t a typical summer slowdown. The stress is broader, deeper, and lasting longer than usual. While national conditions aren’t collapsing, they’re slowing – and Greater Palm Springs is more exposed than most.

Business owners and agency leaders should prepare for a muted fall hiring season, especially in tourism-related sectors. Any recovery will depend heavily on consumer confidence, local reinvestment, and external demand.

What to Watch Next (Fall 2025 Outlook)

• Fed decision: A rate cut could ease borrowing and support business expansion.
• California job trends: Will local-serving sectors continue to carry the weight?
• Tourism indicators: Fall bookings and hotel occupancy will be early signals.
• Local government hiring: Budget constraints and federal funding shifts could impact public sector stability.
• Labor market mismatch: Rising job seekers with fewer open positions is a dynamic to watch, especially in East Valley cities like Coachella.