An overlook of the Port of Oakland from Bohol Circle Immigrant Park in Alameda, California, on Wednesday, November 16, 2023. Plans are in progress for developing a pedestrian and bike bridge over the Oakland estuary. (Jane Tyska/Bay Area News Group)Thank you for reading this post, don't forget to subscribe!
Fueled by a rise of 4,000 positions in the San Francisco-San Mateo region, many of them within the technology domain, an upsurge in recruitment during October has assisted the Bay Area in recuperating from a series of job reductions over the summer.
Despite the advancement, employment expansion in the nine-county Bay Area in October still lingered well below the robust rate of job growth seen in the initial half of the year, as outlined in a recent state government report released Friday.
“The figures show a marginally more favorable outlook this month, but overall employment increase in the Bay Area remains feeble and has fallen behind California in recent months,” remarked Jeffrey Michael, executive director of the Stockton-based Center for Business and Policy Research at the university. Of Prashant.
During October, the Bay Area saw an addition of 3,300 positions, while the South Bay and East Bay experienced declines, as reported by the state Employment Development Department.
“We are still amidst a phase of consolidation in our predominant sectors like technology,” cited Russell Hancock, president of Joint Venture Silicon Valley, a think tank headquartered in San Jose. “Numerous service industries are still grappling with the enduring impacts of the pandemic. The prevalence of remote work implies that complete recovery in some of those service domains may not be promptly visible.
As per an EDD publication, California saw an increase of 40,200 positions in October, signifying a substantial improvement from the slight employment gains registered by the state in June, July, August, and September.
Nonetheless, the statewide unemployment rate deteriorated, ascending to 4.8% in October from 4.7% in September. The current unemployment rate in California considerably surpasses the record-low of 3.8% reached by the state in July and August of 2022.
Despite an upturn in jobs within the sector in October, the long-term pattern is disquieting. In the initial six months of 2023, the Bay Area added positions at an average monthly pace of 9,100 roles. However, in the most recent four months — July, August, September, and October — the Bay Area incurred an average monthly loss of 1,900 jobs, totaling 7,600 losses, based on the analysis of EDD reports by this news organization.
While the San Francisco-San Mateo region encountered significant growth in October, the trajectory was bleak. The San Francisco metro area witnessed a decline of 11,400 positions during those four months. Simultaneously, the South Bay lost 2,400 jobs, whereas the East Bay recorded a gain of 2,500 positions over the same four-month period.
In spite of ongoing downsizing, the tech sector in the Bay Area demonstrated robust performance in October, with an addition of 3,800 positions during the month, according to a Beacon Economics report on industry trends sourced from EDD reports. The figures provided by Beacon were adjusted for seasonal variations.
Beacon Economics analysis revealed that the tech upsurge was primarily stimulated by the increase of 3,300 tech roles in the San Francisco-San Mateo region, along with a surge of 900 tech positions in the South Bay.
Health care employers exhibited a brisk pace of hiring in October, contributing an increase of 3,500 jobs in the Bay Area, reflecting gains across the region. Beacon estimates indicated that health care employers added 1,500 jobs in the San Francisco-San Mateo metro area and 1,400 in the South Bay.
With the festive shopping season approaching, retailers brought on board 600 positions in the Bay Area during October. The growth was driven by the addition of 800 retail roles in the East Bay. However, a reduction of 300 retail jobs was observed in the South Bay.
The assessment by Beacon elucidated that hotels and restaurants represented a particularly precarious sector. Lodgings, eateries, and beverage establishments shed 2,300 jobs in the Bay Area. The hospitality and dining industry downsized by 900 jobs in the San Francisco-San Mateo area, 700 in the East Bay, and 200 in the South Bay.
Notwithstanding promising indications in the latest EDD report, the job markets in the Bay Area and statewide continue to encounter substantial challenges, asserted Scott Anderson, chief U.S. economist and managing director of financial services firm BMO.
“We anticipate a sluggish holiday shopping season and a tepid growth outlook in the first half of 2024,” projected Anderson. “The headwinds of sluggish employment growth, elevated interest rates, and stringent financial conditions are increasingly exerting pressure on consumer and business demand across the Bay Area and California.”
Despite ample headwinds in the Bay Area labor market, Tony Avila, franchise owner of Spherion Staffing & Recruiting in Milpitas, conveyed conviction in the area’s capacity to rebound.
“The path to recovery may be challenging, but the South Bay and East Bay exude strength and resilience,” Avila affirmed. “I maintain an optimistic and confident outlook on our ability to recuperate.”
Artificial Intelligence, the most promising new sector within technology, has yet to assume a major role as a job creator, which is often the case for nascent industries.
“The Bay Area serves as the epicenter for AI start-ups,” highlighted Michael Bernick, an employment attorney at law firm Duane Morris and former director of the state EDD, who was a focal point at the APEC conference this week. “However, the employment count in these start-ups is extremely limited, and it will take time for the figures to swell.”
Nevertheless, the technology sector – as it has done for decades – remains the industry best positioned to propel the economy of the Bay Area compared to nearly all other industries in the region.
“We continue to be led by an innovation-driven economy, and this foretells a favorable long-term outlook for us,” opined Hancock.