An October hiring upswing — buoyed by a gain of 4,000 jobs in the San Francisco-San Mateo region, many in the tech sector — has helped the Bay Area snap back from a string of summer job losses.
Despite the improvement, the job gains in the nine-county Bay Area in October remained well below the robust pace of employment increases the region saw in the first half of the year, according to a new state government report released Friday.
“The data is a little more positive this month, but Bay Area employment growth remains weak overall and lags California as a whole in recent months,” said Jeffrey Michael, executive director of the Stockton-based Center for Business and Policy Research at the University of the Pacific.
The Bay Area added 3,300 jobs in October even as the South Bay and the East Bay tallied job losses, the state Employment Development Department report shows.
“We’re still in a period of consolidation in our driving industries like tech,” said Russell Hancock, president of Joint Venture Silicon Valley, a San Jose-based think tank. “Many of our service industries are still grappling with the lasting effects of the pandemic. Working from home means we may not see a full recovery in some of those service sectors.”
The South Bay lost 400 jobs, the East Bay shed 500 positions, and the San Francisco-San Mateo region gained 4,000 jobs, the state reported. All of the numbers were adjusted for seasonal volatility.
California added 40,200 jobs in October, which represented a big improvement from the feeble employment gains the state reported in June, July, August and September, according to an EDD release.
The statewide unemployment rate worsened, however, rising to 4.8% in October compared to 4.7% in September. The current California jobless rate is well above the record-low level of 3.8% the state achieved in July and August of 2022.
Although the region added jobs during October, the longer-term trend is worrisome. During the first six months of 2023, the Bay Area gained employment at a pace that averaged 9,100 jobs a month. But over the four most recent months — July, August, September and October — the Bay Area lost an average of 1,900 jobs monthly, or 7,600 in total, this news organization’s analysis of the EDD reports shows.
While the San Francisco-San Mateo region experienced a robust October, the trend was grim. The San Francisco metro area lost 11,400 jobs during those four months. Over the similar period, the South Bay lost 2,400 jobs. The East Bay, however, gained 2,500 positions during that same four-month stretch.
The Bay Area tech industry, despite ongoing layoffs, posted a sturdy performance in October, adding 3,800 jobs during the month, according to a Beacon Economics report of industry trends that the company compiled from the EDD report. The Beacon numbers were adjusted for seasonal variations.
The tech upswing was propelled primarily by a gain of 3,300 tech jobs in the San Francisco-San Mateo region and an increase of 900 tech jobs in the South Bay, the Beacon Economics analysis determined.
Health care employers hired at a brisk pace in October. The health care industry added 3,500 jobs in the Bay Area, with gains appearing throughout the region. Health care employers added 1,500 jobs in the San Francisco-San Mateo metro area and 1,400 in the South Bay, Beacon estimated.
With the arrival of the holiday shopping season on the horizon, retailers added 600 jobs in the Bay Area in October. This upswing was paced by a gain of 800 retail jobs in the East Bay. The South Bay lost 300 retail jobs.
Hotels and restaurants were particularly weak sectors, the Beacon assessment found. Accommodations, restaurants and drinking establishments lost 2,300 jobs in the Bay Area. The hotel and restaurant business chopped 900 jobs in the San Francisco-San Mateo region, 700 in the East Bay and 200 in the South Bay.
Despite the hopeful signs in the latest EDD report, the Bay Area and statewide job markets face considerable challenges, said Scott Anderson, chief U.S. economist and managing director with BMO, a financial services firm.
“We anticipate a sluggish holiday shopping season and a lackluster growth outlook in the first half of 2024,” Anderson said. “The headwinds of slowing job growth, higher interest rates, and tightening financial conditions increasingly weigh on consumer and business demand in the Bay Area and California as a whole.”
Although plenty of headwinds menace the Bay Area job market, Tony Avila, franchise owner of Spherion Staffing and Recruiting in Milpitas, said the region is in good shape to bounce back.
“The road to recovery is tough, but the South Bay and East Bay are strong and resilient,” Avila said. “I remain hopeful and confident in our capacity to bounce back.”
Artificial intelligence, the most promising new sector within tech, isn’t in a position yet to be a major job generator, which is often the case for a fledgling industry.
“The Bay Area is ground zero for the AI start-ups, which were such a focus at the APEC conference this week, said Michael Bernick, an employment attorney with law firm Duane Morris and a former director of the state EDD. “However, the number of jobs in these start-ups is very small and will take some time to grow in number.”
Even so, the tech sector — as has been the case for decades — is the industry that more than nearly all others in the region is in the best shape to buoy the Bay Area economy.
“We continue to be an innovation-based economy, and this bodes well for us over the long term,” Hancock said.