Marin County employers added an estimated 300 payroll jobs in September, according to Beacon Economics. Economists warn that a shrinking labor force could make hiring harder.

Marin's unemployment rate fell to 4.3% in September, tied for sixth lowest among California's 58 counties, according to data the California Employment Development Department (EDD) released Oct. 16. The rate was down from 4.4% in August, the North Bay Business Journal reported.

Marin's labor force contracted 1.7% year over year to 123,400 people, while the number of employed residents fell 1.4% to 118,100, according to the Business Journal’s report. Those annual changes show a smaller pool of residents working or actively seeking work.

That pattern held across the North Bay, as the Business Journal reported. The combined labor force in Sonoma, Solano, Marin, Napa, Mendocino and Lake counties fell by 11,250 people, or 1.5%, from September 2025.

Sonoma State University economist Robert Eyler told the Business Journal the speed of the decline remains puzzling. He said the shrinking workforce could reflect retirements among an aging population, changes in immigration and migration, or revisions to preliminary estimates. Eyler said his key concern is whether the labor force will flatten out or keep descending.

Beacon Economics estimated the San Rafael Metropolitan Division’s payroll grew 0.3% year over year on a seasonally adjusted basis, trailing Napa at 1.9%, Santa Rosa at 1.1% and Vallejo at 0.8% among North Bay markets. The division encompasses Marin County, rather than just the city of San Rafael. The firm pegged the division’s September gain over August at 300 jobs, according to its regional report.

Those seasonally adjusted figures differ from the EDD's unadjusted county estimates. Payroll estimates count jobs at workplaces, while resident employment estimates count people based on where they live.

Stafford Nichols, a Beacon Economics research manager, warned that lower unemployment does not mean easier hiring. In Beacon’s statewide report, Nichols said employers could still struggle to find workers with the skills they need despite slower job growth.

Beacon cited an aging population, California's housing shortage and reduced international migration as constraints on labor supply. The state's labor force shrank 1.9% over the year, more than triple the national decline of 0.6%.

In Marin, a 700-job gain in private education and health services over the year offset losses in information, construction, financial activities and trade-related employment, the Business Journal reported. Statewide, Beacon estimated that without health care gains, California's payroll would have grown just 0.2% over the year.

Eyler said housing costs and worker availability could constrain local industries even when customer demand stays strong. He expects health care to remain a leading source of regional job growth for about five years but questioned whether that expansion could pull workers away from manufacturing and technology employers, according to the Business Journal.

The next round of employment data, covering October, is scheduled for release Nov. 20, according to EDD.