Bay Area adds jobs in June, but recovery still slow

Nearly 17,000 hotel, restaurant jobs account for 92% of region’s gains

The Bay Area added jobs at a brisk pace in June, a surge that was fueled by robust gains in hotel and restaurant hiring as the California economy reopened.

But the gains reported Friday were less than economists had hoped, and the region still has far to go to reach its pre-pandemic peak.

“In contrast to previous recoveries in California, workers are slow to return to the job market,” said Michael Bernick, an employment attorney with law firm Duane Morris and a former director of the state EDD.

Still, the nine-county region added 18,400 jobs during June, the most jobs added during a month since March, the state Employment Development Department reported.

Santa Clara County gained 2,700 positions, and the San Francisco-San Mateo metro area was up 11,900 jobs in June. The East Bay lost 400 jobs.

Hotels and restaurants were the primary pro

pellants for the hiring last month, according to seasonally adjusted estimates from Beacon Economics and the UC Riverside Center for Economic Forecasting.

Restaurant and hotel employers added 16,900 jobs

in June, a whopping 92% of the jobs the Bay Area gained last month, Beacon and UC Riverside determined.

California added 73,500 jobs in June — which means the Bay Area accounted for 25% of all the positions added in the state last month.

The statewide unemployment rate of 7.7% was unchanged from May, the EDD reported.

Even though California added jobs during June, the most recent results marked four consecutive months of declining gains, a trend that suggests the statewide jobs recovery has lost some steam.

Similarly, the Bay Area job gains in June fell far short of the hiring increases earlier in 2021. The Bay Area added 33,200 jobs in February, which was nearly double the gains in June.

Despite clear signs that California’s job engine is slowing, Gov. Gavin Newsom touted last month’s employment performance.

“California continues to lead the nation’s economic recovery, adding 73,500 new jobs in May,” Newsom said Friday.

The governor pointed out that the most recent job gains were far above what was normal even during good economic times for the state.

“Before the pandemic, a 98,500-job increase was California’s largest job gain on record,” Newsom said. “Since February, we’ve averaged 111,740 new jobs per month.”

But the Bay Area and California still have a long way to go before they have recovered all of the jobs that were erased by epic employment losses that jolted both regions during March and April 2020.

Here is how severe the job deficits are in California, the Bay Area, and three key metro regions:

• California lost a jawdropping 2.71 million jobs during March and April of last year and has regained only 54.2% of the jobs it lost. The state still suffers from a deficit of 1.24 million jobs, compared to its peak.

• The Bay Area lost 638,600 jobs over the two months of employment losses in 2020 and has recovered just 46.4% of its lost jobs. The nine-county region’s jobs deficit totals 342,000.

• Santa Clara County lost 153,600 jobs and has recovered 46.9% of its lost jobs, outpacing the Bay Area but lagging California. The South Bay’s jobs deficit is 82,000.

• The East Bay lost 196,200 jobs and has recovered 47.1% of its lost positions, the best performance of the Bay Area’s three major urban centers. The East Bay jobs deficit is 104,000.

• The San FranciscoSan Mateo region remains weak. This area lost 187,500 jobs and has regained 40.3% of its vanished positions. The San Francisco metro area’s jobs deficit is 112,000.

All of these areas — including California — are trailing the entire nation in terms of the percentage of jobs recovered.

“There is still a substantial jobs deficit compared to pre-pandemic levels, and the state’s economy is lagging the national recovery,” said Taner Osman, research manager with Beacon Economics.

The United States has recovered 69.8% of the jobs it lost during March and April 2020.

Despite the hiring boom for hotels and restaurants in the Bay Area, other industries posted only modest gains or suffered outright losses, the Beacon and UC Riverside assessment determined.

Other services, a category that includes nail salons, barbershops and beauty salons, added 1,400 jobs in Santa Clara County and 2,100 positions in the San Francisco-San Mateo region.

Construction companies shed 1,500 jobs in the East Bay and chopped 700 positions in the San FranciscoSan Mateo region.

The tech sector was uneven. Tech companies added 1,300 jobs in San Francisco-San Mateo but cut 1,000 jobs in Santa Clara County and slashed 700 positions in the East Bay.

It’s possible this troubling trend might change after Sept. 4 when a federal supplement for unemployment insurance benefits ends, schools fully reopen and child care is expected to be more available.

Experts believe that jobless workers appear to be hesitating about finding new employment.

“We’re seeing that a good number of workers are slow to return,” Bernick said. “They are reconsidering if they want to go back to their previous work lives.”

So far, the employment rebound in the Bay Area has been disappointing to some economists such as Steve Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy.

“I thought the job gains would be stronger,” Levy said. “We could see a bump in hiring later this year. But this is less than what I had hoped for or expected.”