Bay Area job market rallies
The Bay Area job market last month delivered its strongest gains in eight months, raising hopes that the region’s economy might finally be starting to shake off the economic effects of the coronavirus pandemic.
The region added 21,100 jobs in October, powered by big increases in Santa Clara County and the San Francisco-san Mateo region along with sturdy gains in the East Bay, the state Employment Development Department reported Nov. 19.
“This is more in line with what we have been long expecting,” said Russell Hancock, president of Joint Venture Silicon Valley, a San Josebased think tank. “It just took us longer to get here than we thought.”
The employment improvement was the Bay Area’s best showing since March, when it gained 23,900 jobs, this news organization’s analysis of the new EDD report shows.
Jeffrey Michael, executive director of the University of the Pacific’s Stockton-based Center for Business and Policy Research, said the region’s job gains were led by business, scientific and technical services — “the traditional strengths of the Bay Area’s tech and information economy.”
Santa Clara County added 8,100 jobs, the San Francisco-san Mateo region gained 8,700 jobs, while the East Bay added 2,300 positions. All the numbers were adjusted for seasonal variations. California, meanwhile, added 96,800 jobs last month and the statewide unemployment rate improved slightly to 7.3%, down from 7.5% in September.
“The Bay Area economy is back on track with strong job gains both in September and
October,” said Stephen Levy, director of the Palo Altobased Center for Continuing Study of the California Economy. Initially, the EDD estimated that September job gains in the Bay Area were 11,800, a significant drop in the pace of recovery. But the state has since revised those numbers, reporting 18,200 employment gains in September — 6,400 more than first reported.
In October, the Bay Area produced 21.8% of California’s job growth — even though the nine-county region has just 20.8% of the payroll jobs that existed statewide last month.
“The Bay Area assumed its familiar role as an outsized contributor to the state payroll job growth,” noted Michael Bernick, an employment attorney with law firm Duane Morris and a former director of the state EDD.
Gov. Gavin Newsom in a prepared statement said the state continues to recover, noting that “California has again created more new jobs than any other state, averaging six-figure job growth for nine months straight.”
Beacon Economics, however, suggested that the state’s job market is far from healed.
“We’re close to two years since the world was broadsided by the pandemic and California’s unemployment rate remains stubbornly high,” said Taner Osman, research manager with Beacon Economics. “There are no quick fixes here and we expect unemployment to stay elevated well into 2022.”
Among the smaller urban centers in the Bay Area during October, Sonoma County added 1,700 jobs, Napa County gained 400 positions and Marin County gained 100 jobs, while Solano County lost 200 jobs.
But experts warned that the Bay Area — and the state
— must extend employment improvement over a considerable period of time to return to its pre-coronavirus robust state.
“We still have a long way to go to get back to normal,” said Patrick Kallerman, vice president of research with the Bay Area Council Economic Institute. “The steady increase in jobs, newly approved vaccines for children, and signaling from many organizations that they will seriously begin returning to work in January all make me hopeful.”
Two sectors that have been closely watched in the wake of the coronavirus outbreak experienced sharply differing fortunes during October, according to seasonally adjusted industry results compiled by Beacon Economics and the UC Riverside Center for Economic Forecasting.
Tech companies added 10,100 jobs in Santa Clara County and the San Francisco-san Mateo region during October. But Bay Area hotels and restaurants, which were hit hard during the pandemic shutdowns, lost 900 jobs, according to Beacon and UC Riverside.
Some experts predict the upswing in employment will persist. “Future growth looks good with record venture capital spending, the resumption of international travel, and strong holiday travel and spending,” Levy said.
What is becoming likely is that the impact of coronavirus-linked business shutdowns may have caused longterm economic shifts.
“A lot of the PRE-COVID jobs aren’t actually coming back, but the POST-COVID economy is creating lots of new and different jobs,” Hancock said. “Now it seems we’re poised for take-off, and it is happening at the very same time that all the seasonal jobs are coming online.”