Bay Area jobs in robust state

Santa Clara County led region in helping to lower jobless rates to best levels in nearly two decades

The Bay Area added 7,600 jobs during October, a welcome counterpoint to the past two months of employment losses, and the region’s jobless rates improved to their best level in nearly two decades, state labor officials and economists reported Friday.

The upswing, combined with a drop in unemployment rates, suggested the Bay Area’s economy is in a robust state as it enters the vital holiday hiring and shopping season.

“There is no doubt at all that we are at full employment,” said Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy.

However, sustaining that generally robust job market could pose plenty of challenges.

“People are employed, wages are going up, but

housing prices are going up even faster,” Levy said. “Future job growth depends on being able to bring more people into the region. And that means we have to address our housing and transportation problems.”

In the Bay Area’s three major urban centers, jobless rates improved to their best levels since the end of 1999, marking the healthiest job market since the height of the dot-com boom, according to a Beacon Economics analysis of the state’s report.

The October unemployment rate was 3.4 percent in the East Bay, 3 percent in Santa Clara County and 2.5 percent in the San Francisco-San Mateo region.

Santa Clara County was, by far, the strongest labor market in October, adding 5,900 jobs, according to seasonally adjusted figures released by the state Employment Development Department. Those gains halted two consecutive months of job declines the prior two months.

The East Bay also improved, gaining 1,600 jobs in October, compared to relatively meager hiring activity in August and September, the EDD figures showed.

The San Francisco-San Mateo region, however, appears to have fallen into something of a slump. That area, long touted as a hotbed for tech hiring, saw no uptick in job totals, after racking up 4,300 job losses during August and September.

Overall, California added 31,700 jobs during October and the statewide jobless rate dropped from 5.1 percent to 4.9 percent, the EDD reported.

“We’re now up to 91 months of employment expansion in California, since February 2010,” said Michael Bernick, a former director of the state EDD and a fellow with the Milken Institute. “We’re now bumping up against the longest employment expansions in California since World War II, the employment expansions of 92 months in the early 1990s and 113 months in the 1960s.”

The technology sector was particularly strong, adding 3,500 jobs in Santa Clara County, 900 in the East Bay and 700 in the San Francisco-San Mateo region, according to a Beacon Economics and UC Riverside estimate derived from the state report.

Santa Clara County also added 900 construction jobs and 500 hotel and restaurant positions, the Beacon analysis found. The East Bay’s strongest non-tech industries were construction and health care, which gained 900 jobs each. Manufacturers added 600 jobs in the East Bay. The weakest industry in the Alameda CountyContra Costa County area last month was restaurants and hotels, which lost 1,700 jobs.

With unemployment rates so low, it is becoming more difficult for Bay Area employers to find workers, especially for medium-income or low-income positions, said Mark Vitner, senior economist with San Francisco-based Wells Fargo Bank.

“The Bay Area’s rapid job growth is crowding people in mid-level and mid-skilled jobs,” Vitner said. “We have seen a big slowdown in hiring for administrative support positions, many of which are clerical jobs. We are seeing a much tighter labor force as people are priced out of the Bay Area.”

As positive as the October jobs numbers are, job growth overall has slowed markedly this year in the nine-county region.

Over the one-year period that ended in October, the Bay Area added 45,100 jobs, with Santa Clara County accounting for more than one third of those gains. The East Bay gained 11,800 jobs during the same period, while the San Francisco-San Mateo area added 12,800 jobs. Last year, in contrast, the Bay Area gained 109,100 jobs.

But despite the recent sluggishness, tech giants are paving the way for mega expansions.

Facebook intends to expand its Menlo Park campus. Apple, in addition to its huge new spaceship campus in Cupertino, has bought a big swath of land and buildings in north San Jose. And Google is eyeing expansions in northern Mountain View and Sunnyvale, in addition to its plans for a downtown San Jose transit-oriented village where it could employ 15,000 to 20,000 workers.

“The future looks O.K. with these technology company expansions, but for now, we are in a slowdown that has lasted for a year,” Levy said.