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Bay Area starts 2024 with robust job gains led by South Bay upswing

Screenshot 2024-03-11 at 5.21.23 PM

Bay Area starts 2024 with robust job gains led by South Bay upswing
But California, Bay Area job markets were not as strong as first thought

By George Avalos | Bay Area News Group | PUBLISHED: March 8, 2024 at 10:00 a.m.

The Bay Area and California experienced sturdy employment gains in January to kick off 2024 — but new data released Friday shows the job market in the nine-county region and statewide was not nearly as strong in 2023 as originally thought.

Employers in the Bay Area added 13,600 jobs in January, propelled by big employment gains in the South Bay, according to seasonally adjusted numbers published by the state’s labor agency.

“Silicon Valley’s job growth is impressive, knowing it comes at the very same time that our tech companies are laying people off,” said Russell Hancock, president of Joint Venture Silicon Valley, a San Jose-based think tank.

The Bay Area has added jobs for five consecutive months, including the hiring gains in January, even as thousands of tech workers at major companies such as Meta and Google have faced layoffs.

Here is how the Bay Area’s three largest urban centers fared at the start of the year, as reported by the state Employment Development Department (EDD):

— The South Bay provided the most propulsion for the surge in hiring, adding 5,000 jobs in January.

— The San Francisco-San Mateo region added 3,400 jobs in January.

— The East Bay gained 2,200 jobs in January.

All of the regional metro numbers were also adjusted for seasonal variations.

“The best way to understand what’s happening is that we’re downsizing in some areas and growing in others, and there’s enough growth to offset the losses,” Hancock said.

In total, California added 58,100 jobs in January, the EDD reported.

But the statewide unemployment rate worsened to 5.2%, up from 5.1% in December. The current jobless levels in California are far higher than the record-low unemployment rate of 3.8% in August 2022.

The new jobs report also contained an ominous set of disclosures in the EDD’s annual revision of previous estimates for monthly job totals in California and all of its metro regions, including the Bay Area.

It turns out that the local job market in 2023 produced 57,500 fewer jobs than first thought.

“While the job growth in January continues the positive momentum for the region’s economy, which mirrors national trends, the losses in tech and office jobs appear to be larger than first thought,” said Jeff Bellisario, executive director of the Bay Area Council Economic Institute. “Which puts the Bay Area’s overall job trajectory even farther behind the rest of the United States.”

In the original estimates, the EDD had guessed the Bay Area added 62,100 jobs in 2023 — but it turned out to be only 4,600 jobs.

Statewide, California’s job market was also nowhere as strong in 2023 as the first estimates predicted. The EDD originally suggested California added 311,000 jobs in 2023. The revised figure? Just 154,900 jobs.

“Not only do the revisions show more limited job growth, but also the latest data show a growth in part-time jobs, rather than full-time jobs” in California, said Michael Bernick, an employment attorney with the law firm Duane Morris, and a former director of the state EDD.

“The downward job revisions for 2023 are consistent with the large number of tech layoffs, the long motion picture and television industry strikes in Southern California, and the drop in trade with China,” said Steve Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy.

While the Bay Area accounted for 23% of all the jobs that were added statewide, the hiring upswing in the nine-county region came despite — not because of — the area’s vaunted tech sector. Hotels and restaurants, health care companies and retailers, among others, added jobs.

The tech industry lost a net 1,900 jobs in the Bay Area in January, according to seasonally adjusted estimates for the sector that Beacon Economics provided to this news organization based on the EDD official figures.

The San Francisco-San Mateo region lost 1,800 tech jobs and the South Bay shed 1,600 tech jobs. The East Bay, however, managed to gain 1,300 tech jobs, the Beacon estimates showed.

No official statistics on the average wages paid to workers hired in January in non-tech sectors are available. Experts, however, believe other industries pay less.

Nevertheless, the job gains in the Bay Area in the month of January exceeded the gains in the nine-county region for all of 2023, following the revisions.

“The hopeful news shown in recent job gains is that the strike is over, port traffic is growing, and most importantly for the Bay Area, tech layoffs are cooling,” Levy said. “Tech job growth should resume this year.”

Scott Anderson, chief U.S. economist for BMO Capital Markets, also believes a silver lining has come into view despite the gloom cast by the weaker-than-expected job gains in the Bay Area during 2023.

“The silver lining is job growth appears to have picked up some pace in recent months, and January’s job gains were robust and broad-based,” Anderson said. “There are no visible signs of real serious labor market trouble ahead. Still, the year is early, and one good month does not make an annual trend.”

Some analysts are optimistic the Bay Area could experience a brighter 2024.

“We see 2024 being a much more stable economic year than 2023,” Bellisario said, “with greater economic confidence replacing the uncertainty of the prior year for both employers and consumers.”

Full article: https://www.mercurynews.com/2024/03/08/bay-area-job-gain-tech-covid-layoff-january-economy-hotel-store-build/