Job growth sputters amid shutdowns in region, state

Job growth in the Bay Area and California sputtered anew during November, an indication that the latest round of coronavirus-linked shutdowns has hobbled staffing efforts and hiring plans just as a revival seemed imminent.

“The recovery stalled in the fall,” said Jeffrey Michael, director of the Stockton-based Center for Business and Policy Research at the University of the Pacific. “I expect job growth to remain stagnant with negative numbers possible in December and January.”

The Bay Area and California both managed to add jobs last month, but at a sharply reduced pace, state labor officials reported Friday.

“It’s a major slowdown,” said Steve Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy. “It’s a result of the activity restrictions.”

Most Bay Area counties were forced to curtail business activities to arrest the spread of the coronavirus under state mandates in mid-November, then enacted even sharper restrictions in early December as hospitals began to fill with patients.

The impact was immediate. Employment gains in the Bay Area in November were about half of the amount of October, while California’s job market slowed even more drastically and produced only 39% of the amount the state gained in October, according to the state Employment Development Department.

“As the coronavirus surge gets underway again, we are seeing job growth

slow down,” said Patrick Kallerman, research director with the Bay Area Council Economic Institute. And with the latest restrictions not yet reflected in jobs numbers, “I’m nervous that in future months we could see pretty large losses in jobs for December and the Bay Area.”

Among the unsettling job trends last month:

• The Bay Area added 17,300 jobs during November, compared with a gain of 32,900 in October.

• Santa Clara County gained 5,200 jobs in November, compared with an increase of 9,000 in October.

• The East Bay added 8,400 jobs last month, compared with job gains of

10,100 in October.

• California gained 57,100 jobs in November, a severe slowdown from the gains of 145,600 jobs the prior month.

“These are numbers we fully expected,” said Russell Hancock, president of Joint Venture Silicon Valley, a San Jose-based nonprofit. “It represents the in-person economy getting slammed shut as the COVID cases increased.”

The kinds of industries that posted job gains in California and the Bay Area during November were the type that might chop jobs in response to renewed government-imposed lockdowns, warned Scott Anderson, chief economist with Bank of the West.

Hotels, restaurants, retail shops, and drinking establishments were among the businesses that accounted

for a big chunk of the employment gains in November, Anderson noted. Many of those are now shutdown or their capacity has been drastically curtailed under the latest restrictions.

“The job revival seen in these sectors in October and November appears fragile and unsustainable,” Anderson said. “We expect big job declines to reappear in these industries in December as furloughs and layoffs once again come home to roost.”

Similar woes could emerge in the Bay Area. During November, hotels and restaurants added 2,000 jobs in Santa Clara County, and these industries added 500 jobs in the East Bay, according to seasonally adjusted numbers from Beacon Economics. Hotels and restaurants chopped 1,500 jobs in the San Francisco-San Mateo region, however.

But there were bright spots. The tech industry was robust in the Bay Area during November. Tech companies added 1,800 jobs in San Francisco-San Mateo, 1,500 in the East Bay, and 1,200 in Santa Clara County, Beacon reported.

Health care firms added 2,500 jobs in the East Bay and 1,100 in Santa Clara County, while transportation and warehouse companies added 1,600 in the East Bay, according to Beacon.

California’s unemployment rate was 8.2% in November, an improvement from a 9% jobless rate in October, the U.S. Labor Department reported.

But the improvement in the jobless rate, along with the gain of roughly 57,000 jobs in California, pale when compared to the mammoth job losses statewide during

March and April.

“This is not a report that will bring much-needed cheer to California’s workers,” said Taner Osman, research manager at Beacon Economics and the UC Riverside Center for Economic Forecasting.

California lost 2.62 million jobs during March and April. From May through November, the state has added back less than half of that, about 1.2 million jobs.

Ominously, at least two warning indicators of future employment trends in the Bay Area and California suggest that hiring has staggered to a halt, said Michael Bernick, an employment attorney with law firm Duane Morris and a former EDD director.

“Local workforce boards across the state are indicating no significant uptick in hiring or job openings,” Bernick said. “The latest numbers of job postings in California show a sharp drop for the first week of December.”

Plus, the trend toward shopping online — which seems to have quickened during the pandemic — could further blunt December performance at a time when retailers normally hire in big numbers for holiday shopping.

“We should expect the December numbers to be even grimmer,” Hancock said. “It’s going to be a long winter.”

Bottom line: The once-robust economy and job market in the Bay Area will remain feeble until at least next spring — or even longer.

“The Bay Area is not immune from the statewide trends,” Anderson said.