Quick Take
Santa Cruz County added 700 jobs in February, the first full month of the new Trump administration. But the region’s tourism shows warning signs as hotel revenue drops and forecasters predict a decline in international travelers to the U.S.
Santa Cruz County’s job market shrugged off broader national economic jitters by adding 700 positions in February, even as the region’s tourism industry is facing fresh challenges, newly released state and local economic statistics show.
The February local jobs report by the California Employment Development Department covered the first full month of the new Trump administration. It offered a mixed economic picture for Santa Cruz County in the wake of cuts to the federal workforce, including to the Santa Cruz operations of the National Oceanic and Atmospheric Administration.
With an unemployment rate of 7.3%, Santa Cruz County ranked 39th among California’s 58 counties in unemployment in February, well behind the state average of 5.5%. San Mateo and Santa Clara counties reported unemployment rates of 3.7% and 4.1%, respectively. Santa Cruz County’s unemployment rate represented about 10,000 unemployed job-seekers in a labor force of 136,700 people in February.
Government employment showed a slight monthly decline of 0.7% in February, though it remains up 6.4% from the same month last year. Meanwhile, the county’s construction sector continues to struggle, with employment down 2% from a year ago.
Still, the state reported that the county gained new jobs overall in February, with total employment rising slightly to 126,700 last month, up from 126,000 in January.
Tourism continues to drive the region’s economic growth, with arts, entertainment and recreational industries posting the strongest gains — up 3.6% from January and 7.4% from the previous year. The leisure and hospitality sector added 200 positions, while jobs in private education and health services grew 2.1% from the same time last year.
However, Santa Cruz County’s tourism industry showed other signs of strain in February, with hotel demand falling 6.1% compared to the same time last year, even as visitors stayed longer and spent more during their stays, according to new data from county tourism officials.
Revenue across the region’s hotel sector was to $7.6 million in February, dropping 3.3% compared to a year earlier, Visit Santa Cruz County said in a report released Monday.
Industry research firm Tourism Economics dramatically revised its 2025 forecast for international visitors to the U.S. as new tariffs and border restrictions get set to take effect, switching from an expected 9% growth to a 5.1% decline — a shift that could cost the county’s tourism industry $18 billion in spending, the Santa Cruz County tourism bureau said. There are already early signs of a slowdown in international visitors nationally, with Canadian land travel to the U.S. down 24% and air travel dropping 13% compared to last February.
In Santa Cruz County, where domestic visitors, particularly Californians, make up more than two-thirds of tourists to the area, the San Francisco-Oakland-San Jose region remained the largest source of visitors last year, followed by Sacramento-Stockton-Modesto and Los Angeles, the tourism bureau said.
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