570 El Camino Real #150-449 Redwood City, CA. 94063

Bay Area job market surges with big December gains to cap off 2023

Screenshot 2024-01-24 103125

Bay Area job market surges with big December gains to cap off 2023
Nearly half of all the jobs created in California last month were in the Bay Area

By George Avalos
| Bay Area News Group | PUBLISHED: January 19, 2024 at 9:50 a.m.

The regional hiring upswing was strong enough to account for nearly half of all of the jobs created in California in December, according to a state Employment Development Department report released Friday.

The Bay Area added 10,600 jobs in December, gaining employment for a third consecutive month – a sharp contrast to the three months of summertime job losses in July through September.

“The job numbers are impressive but not surprising,” said Russell Hancock, president of Joint Venture Silicon Valley, a San Jose-based think tank. “We have a strong and diversified economy, one that defied gravity during the pandemic and continued to grow despite some painful recent adjustments in tech. Now we seem poised for the next big wave.”

The employment additions in the Bay Area last month were led by a gain of 3,000 jobs in the South Bay and an increase of 6,500 jobs in the San Francisco-San Mateo region, according to the state jobs survey. The East Bay added 100 jobs in December. All of the numbers were adjusted for seasonal volatility.

“December capped what turned out to be a surprisingly resilient year for the Bay Area labor market,” said Jeff Bellisario, executive director of the Bay Area Council Economic Institute.

The Bay Area has been able – for – now to withstand the wobbles in the region’s tech industry. “Even with weakness in the tech sector and numerous announced layoffs, the region never plunged into recession, and unemployment rates remain very low,” Bellisario said.

California reported a 23,400-job gain in December and a 12th consecutive month of increases. The last time the state lost jobs during a month was in December 2022.

“The state economy, like the national economy, has avoided the recession hard landing predicted at this time last year,” said Michael Bernick, an employment attorney with law firm Duane Morris and a former director of the EDD. “But job growth has definitely slowed.”

California’s unemployment rate worsened to 5.1%, up from 4.9% in November. That was the highest unemployment level statewide in nearly two years. The last time the California jobless rate topped 5% was in January 2022, when it was at 5.2%.

The hiring in the Bay Area accounted for slightly more than 45% of the jobs added in California in December, this news organization’s analysis of the employment report showed.

“While Bay Area and California job growth rebounded in the fourth quarter, labor market slack also continues to rise, suggesting job creation isn’t rising fast enough to absorb the growing supply of available workers,” said Scott Anderson, chief U.S. economist for BMO Capital Markets. “The rise in labor market slack points to further moderation in economic activity and slower wage growth in the year ahead.”

The Bay Area managed its sturdy job gains in December without help from the tech sector – which impeded the region’s employment upswing.

Tech companies lost a net total of 1,000 Bay Area jobs in December, according to an analysis by Beacon Economics of the EDD’s industry numbers. The survey only tracks industry changes, not job cuts by individual companies.

The Bay Area’s worst tech job losses last month occurred in the San Francisco-San Mateo region, which shed a net total of 1,800 such positions, the Beacon analysis determined. The East Bay lost 100 tech jobs.

The South Bay, however, added 1,000 tech jobs during December. This gain suggests that, as the year came to a close, Santa Clara County was able to better withstand the tech industry layoffs than areas such as the San Francisco metro region.

The hotel and restaurant industry also charged to the Bay Area’s economic rescue as the tech sector overall continued to struggle in the nine-county region, the Beacon Economics analysis showed.

The Bay Area added 5,200 hotel and restaurant jobs in December. The lodging and dining industry produced gains in all seven of the region’s metro centers.

The San Francisco-San Mateo region added 2,400 hotel and restaurant jobs, while the South Bay added 2,000 lodging and dining establishment positions, according to the Beacon assessment.

Health care was another major driver of employment gains in the Bay Area, the Beacon assessment determined. Health care organizations added 2,500 jobs in the San Francisco-San Mateo region and 900 in the East Bay. Health care employers cut 400 jobs in the South Bay.

Retail showed solid gains in December, which hints that in-person holiday shopping was healthy. Retailers added 900 Bay Area jobs last month, paced by an increase of 700 retail positions in San Francisco-San Mateo and another 300 in the South Bay.

Even if more hiccups materialize for the job market in the Bay Area during 2024 – as some experts predict – Hancock is convinced this nine-county region has bright prospects over the near and long terms.

“The so-called exodus seems to have plateaued, and we’re not seeing any significant capital flight or company departures,” Hancock said. “I expect we will long continue to be the engine of California’s economy, even though there will always be cycles and fluctuations.”

The scenarios of a “doom loop” that pundits from other regions have floated may be misplaced and overblown in the view of Bay Area economists such as Steve Levy.

Levy said it’s time for Bay Area leaders and business executives to institute some long-term strategies – such as increasing housing for the world-class companies and industries that are based in the Bay Area. Levy predicts modest job growth in the Bay Area in 2024 and better employment growth in 2025.

“Put aside the talk of doom,” Levy said.

Full article: https://www.mercurynews.com/2024/01/19/bay-area-job-tech-economy-covid-layoff-google-facebook-hotel-december/