Amid the arrival of the foggy summer months and Mayor Daniel Lurie’s unceasing social media videos about downtown’s recovery, San Francisco’s leisure and hospitality industries showed sluggish but consistent job growth over the last year.
Tourism — the centerpiece of the city’s economy, according to Lurie, despite the hype over tech — added 3,300 jobs from May 2025 to May 2026, the California Employment Development Department said.
The San Francisco area, which includes San Mateo County, added 6,400 jobs, which is less than 1% of all employment, the EDD said.
The data show a city whose recovery remains uneven: Tech employment is in flux as an older generation of companies gives way to AI-focused ones, while tourism continues to lag well behind pre-pandemic levels.
The modest growth in jobs was enough to push down the unemployment rate for the fourth consecutive month. In San Francisco County, the unemployment rate is 3.3%, second lowest in the state only to San Mateo County.
The performance of tech and tourism can reverberate across the entire city, according to Ted Egan, chief economist of the city and county of San Francisco.
“The story in other sectors is largely about their demand being driven by what happens to the economic drivers,” Egan said.
That’s why the mixed results among white-collar professions are concerning. The information industry, which includes tech, grew by a slim 900 jobs since last year. Tech employment has roughly returned to its pre-pandemic levels, according to a March report from Egan’s office.
Mass layoffs from Meta, Block, and other companies have been attributed to efficiency gains from AI.
The city’s AI boom should be triggering job growth in legal services and complex finance, Egan said. Instead, the EDD report indicates that jobs in legal services are up, but accounting roles and financial services have dropped.
Over the longer term, professional and business-sector jobs are down more than 25,000 from 2019, according to the March report from Egan’s office.
That could be the result of legacy tech moving out of the city, which can lead to cuts in other sectors, even as new tech companies move in, according to Egan.
“The kind of stable tech jobs that we’ve seen in the past couple of years is really a tug of war between the growth of AI and the decline of an earlier generation of tech in the city, and that over the past few months is looking like it’s resolving itself in favor of the growth of the AI process,” Egan said. “It remains to be seen if the older tech companies sort of tilt back into San Francisco.”
The swings have not been as dramatic in other industries.
As in recent years, new jobs in private education and healthcare continue to buoy the economy as tech and business remains unpredictable.
Government jobs continue to shrink thanks to DOGE-induced layoffs at the federal level and among state workers.
Despite surging home prices and rentals in San Francisco, the real estate industry lost 700 jobs over the last year, one of the largest decreases relative to the industry’s size.
This may be due to large companies downsizing their San Francisco offices, which could prompt cuts to building management, Egan said. The real estate industry lost 900 jobs between December and January, then gained 200 back.
Jay Cheng, the deputy government affairs director of the San Francisco Association of Realtors, said the losses haven’t come from the residential side, where houses are going off market within days and for far over the asking price.
“From what we’re seeing, the market’s pretty hot right now,” Cheng said. “We haven’t seen any change.”
Restaurants and bars added 2,600 jobs, leading the growth in hospitality. Egan said that’s reflective of the long-awaited recovery downtown. Large conferences have returned to the Moscone Center, yet hotel occupancy remains well below pre-pandemic levels. Hotels near Moscone have the lowest vacancy rates in the city.
Amy Cleary, the director of public policy and media relations at the Golden Gate Restaurant Association, said that while the increase in restaurant jobs is encouraging, the impact is outweighed by the rising cost of doing business for restaurants. Tariffs have increased basic costs, and insurance rates and utility bills are higher.
“That’s not a lot of jobs,” she said of the 2,600 additions. “That’s not enough to be one job per restaurant.”
The food service industry in San Francisco typically hires in preparation for tourism in the summer; about 1,000 of those new jobs popped up last month. But as tourism struggles to reach pre-pandemic levels, the restaurant industry is still feeling the impacts.
There are 15,000 fewer leisure and hospitality jobs than there were in 2019, according to Egan’s report.
“It’s not clear yet what summer’s going to bring,” Cleary said. “It’s too early to tell.”
More about the author
Jessica Blough is a news reporter at the San Francisco Standard. Previously, she reported for Mission Local and was an associate editor at Alta Journal.
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