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Bay Area boasts strong job gains in January despite tech layoffs


Bay Area boasts strong job gains in January despite tech layoffs
Job markets have recovered from COVID employment losses in region and state

By GEORGE AVALOS | Bay Area News Group | Published March 14, 2023 at 5:30 a.m. | Updated: March 14, 2023 at 6:31 p.m.

The Bay Area economy powered to robust job gains in January, reaching a crucial milestone in what has literally been a years-long quest: full recovery from the mammoth job losses that clobbered the region at the start of pandemic-linked business shutdowns.

Regionally, the employment upswing was led by the South Bay, the East Bay and the San Francisco-San Mateo metro area, newly released government figures show. California as a whole also finally recovered from substantial job losses during the first two months of the government-mandated business shutdowns to curb the spread of the coronavirus.

Over a period from May 2020 through January 2023, California and the nine-county Bay Area managed to gain more jobs than they lost during March and April 2020, according to this news organization’s analysis of figures posted by the U.S. Bureau of Labor Statistics.

The turning point comes amid a plague of Silicon Valley layoffs. Since mid-2022, tech and biotech companies have announced plans to chop at least 22,900 jobs in the Bay Area, according to this news organization’s analysis of layoff notices filed with the state Employment Development Department.

On Tuesday, Menlo Park-based Facebook parent Meta revealed plans to cut 10,000 jobs in the coming days, weeks and months. The cutbacks are on top of the 11,000 staffing reductions the tech titan conducted in November.

“You wouldn’t think it, with so much gloomy news of late, but the Bay Area economy continues to power upwards,” said Russell Hancock, president of Joint Venture Silicon Valley, a San Jose-based think tank. “Job creation is happening right alongside the layoffs. Unemployment is hitting historic lows, and our fundamentals are sound.”

Should the job market remain strong, upward pressure could affect costs if workers demand higher wages from employers anxious to hire or retain them. Inflation is already a big factor in the Bay Area and nationwide. The Bay Area inflation rate, as measured by consumer prices, rocketed higher by 5.3% on a yearly basis in February, the U.S. Bureau of Labor Statistics reported Tuesday. That is a faster annual increase than the 4.9% jump in consumer prices in December.

Some troubling trends emerged from the new jobs calculations that were produced as a result of the government’s annual revision of nonfarm job totals in California, the other 49 states and hundreds of metro regions nationwide.

The major disappointment: During 2022, the job markets in the Bay Area and California were weaker and produced smaller job gains than initially calculated, this news organization’s analysis of the annual employment revisions shows.

In 2022, the Bay Area gained 127,200 jobs — 23,400 fewer than the original estimate of 150,600. Similarly, California gained 538,600 jobs in 2022, 82,800 fewer than the 621,400 jobs that experts had initially estimated.

The Bay Area added 23,100 jobs during January of this year, seasonally adjusted figures posted by the federal labor agency show.

The South Bay added 5,100 jobs, the East Bay gained 7,900 positions and the San Francisco-San Mateo metro region added 8,900 jobs in January. All of the numbers were adjusted for seasonal volatility.

California, the Bay Area, Santa Clara County and the San Francisco-San Mateo region have now recovered more jobs than they lost before the onset of the business shutdowns. Of the Bay Area’s three major metro areas, only the East Bay remains in a coronavirus-linked jobs deficit.

With the latest report, the Bay Area has now gained jobs for 24 consecutive months. The last time the region lost positions was in January 2021. California gained 96,700 jobs in January, but that came on the heels of a loss of 20,200 jobs in December, the Bureau of Labor Statistics reported.

What isn’t clear from the current numbers is what role the tech sector has played in contributing to, or undermining, the sturdy gains in the Bay Area and California.

The state EDD last week announced it had encountered technical problems and glitches in releasing its regular monthly report on the job markets in California and the Bay Area, which would normally reveal the current and long-term performance of the tech sector and dozens of other industries.

What is clear, however, is the remarkable economic comeback that the Bay Area, California and other metro regions in the state have produced in the wake of the coronavirus-triggered business lockdowns.

California lost a staggering 2.75 million jobs during March 2020 and April 2020. But from May 2020 through January 2023, the Golden State added 3.05 million jobs, which equates to a post-COVID jobs surplus statewide of 293,800 jobs.

The Bay Area, similarly, after losing 645,600 jobs in those first two months of the shutdowns, gained 646,600 jobs during those nearly three years since, for a surplus of 1,000 jobs.

Of the Bay Area’s three major metros, the South Bay has performed most strongly. The South Bay overcame an initially COVID-linked loss during those early months of 155,700 jobs to gain 174,200 jobs from May 2020 through January 2023. That works out to a jobs surplus of 18,500 jobs.

One of the potential dark clouds to cast a shadow over the Bay Area job market is the unknown ultimate fallout from the collapse and failure on Friday of Silicon Valley Bank. Additionally, the coronavirus has dislocated some sectors of the Bay Area economy.

“Some sectors may never completely recover because of new work-from-home patterns that appear to be permanent,” Hancock said. “The collapse of a major financial institution will have some major fallout for workers at start-up companies.”

Despite all that, the Bay Area has remained remarkably resilient, experts say.

“The January numbers show that our region’s economy, despite whatever you might throw at it, continues to be a powerhouse,” Hancock said.

Full article by George Avalos: https://www.siliconvalley.com/2023/03/14/bay-area-job-gain-tech-covid-layoff-google-facebook-january-economy/