Bay Area employment ‘on a roll’
Region tops 4.1 million jobs for the first time, with 10 straight months of gains
For the first time, the nine-county Bay Area has topped 4.1 million jobs, an employment winning streak that now has extended to 10 consecutive months, a state government labor report released on Friday shows.
In a fresh indication that any potential economic downturn remains beyond the horizon, the Bay Area added 5,100 jobs during August. Last month’s upswing was led by the region’s three major employment hubs, the South Bay, East Bay and San Francisco-San Mateo region, the state’s Employment Development Department reported.
“The Bay Area has been on a roll for a long time,” said Mark Vitner, senior economist with San Francisco-based Wells Fargo Bank. “The region continues to be on a roll because the tech sector is the fastestgrowing part of the economy.”
The Bay Area’s job market growth has outpaced the state and the nation, this news organization’s analysis of labor statistics shows. Over the one-year period that ended in August, job totals grew by 2.5% in the Bay Area. During the same 12-month stretch, the nation’s job market expanded by 1.4% and California’s by 1.8%.
The East Bay gained 2,400 jobs in August, while the San FranciscoSan Mateo region added 2,200 positions and the South Bay added 1,900 jobs, according to the new EDD report. Santa Cruz County added 200 jobs. All the numbers were adjusted for seasonal variations.
“This was a solid month for the Bay Area,” said Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy. “It’s possible the rate of growth is slowing, but the gains are still solid.”
During August, the tech sector powered to big gains in the South Bay but managed only a modest gain in the East Bay and actually shed jobs in the San Francisco-San Ma
teo region, according to an analysis of industry trends prepared by Beacon Economics and UC Riverside.
Tech companies added 2,700 jobs in Santa Clara County, increased staffing by 500 in the East Bay but reduced staffing in the San Francisco-San Mateo region by 300 in August, the Beacon and UC Riverside assessment determined.
During August in the East Bay, administrative support services, which include numerous office and clerical jobs, added 1,100 positions, while construction companies increased payrolls by 700. San Francisco-San Mateo employers added 900 health care jobs. In Santa Clara County, besides the robust tech sector, the strongest industry was administrative and support services, which added 700 positions, Beacon and UC Riverside determined.
California added 34,500 jobs during August, and the statewide unemployment rate remained unchanged at a record-best 4.1%. That mark, which has been achieved eight times since July 2018, is the lowest unemployment rate on record for California.
California’s employment is also in record territory, economist Sun Won Sohn, a Los Angeles-based economist and president of SS Economics, stated in a research note on Friday.
“It is time to celebrate,” Sohn said. Referring to the longevity of California’s economic boom, Sohn added, “This expansion is now 114 months long, the longest on record.”
The Bay Area job market has climbed to lofty summits. For the first time, the Bay Area has more than 4.1 million nonfarm payroll jobs. The last time the nine-county region suffered a job loss was in October 2018, the EDD statistics show.
Plus, the types of jobs that are appearing in the South Bay and San Mateo regions, according to Levy, are well-paying tech positions. It appears the tech sector has yet to cool off in the Bay Area, Levy said.
“The job growth in these areas is fantastically positive in terms of income gains,” Levy said. “They are information jobs, professional, scientific and technical positions, tech jobs, categories that are higher-paying and faster-growing.”
The tech sector also appears to be changing the nature of business investments. In decades past, the economy’s expansion was often fueled by — and recessions were ushered in by — the pace of investments in equipment and buildings by businesses. Much of that business investing often took the shape of purchasing equipment and machines, as well as leasing or purchasing buildings for their operations.
“The tech industry is disrupting how capital expenditures used to take place, and a lot of that disruption is coming from the Bay Area,” Vitner said. “Companies don’t need to occupy as many physical buildings, they don’t need to build or buy as many machines. The stuff, the information, is all stored in the cloud.”
The changes brought on by the tech sector also may curtail the chances of severe employment losses in the near future. Businesses have tech tools to operate more efficiently.
“This expansion is more durable,” Vitner said. “There is no overbuilding of commercial real estate. There is no over-buying of machines and equipment. The Bay Area benefits from all this because of the tech industry.”