The Bay Area economy added jobs at a brisk pace in June, raising hopes that the region’s employment picture is turning brighter after being jolted by losses back in March, a new state government report shows.
Robust gains in Santa Clara County helped power the Bay Area to a gain of 9,200 jobs in June, the state Employment Development Department reported Friday. That represented nearly 80% of all the jobs added in California for the month.
“The Bay Area is once again assuming the outsized employment role it played throughout much of the 2021 and 2022 recovery in California as a main driver of job growth,” said Michael Bernick, an employment attorney with law firm Duane Morris and a former director of the state EDD.
Steve Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy, noted that the June job total was the highest on record for the region and Silicon Valley.
The good news comes at least partly because the tech layoffs that have hounded the region’s economy since early 2022 have tailed off, a Beacon Economics industry-specific analysis of the EDD report shows. In fact, the Bay Area tech industry added a small number of jobs in April, May and June after significant losses in the first quarter of the year, according to the Beacon analysis.
Overall, the Bay Area has now added jobs for three consecutive months after losing jobs in March, although the increase in June was somewhat weaker than the upswing in May, the EDD report for the overall job sector shows.
The South Bay added 4,700 jobs in June, while the San Francisco-San Mateo region added 3,100, and the East Bay another 1,100, according to the EDD report. All of the numbers were adjusted for seasonal volatility.
“These numbers suggest that we’ve pulled through a period of adjustment, and we’re poised now for liftoff,” said Russell Hancock, president of Joint Venture Silicon Valley, a San Jose-based think tank.
California as a whole gained 11,600 jobs. Santa Clara County alone produced 40% of the jobs added in the state in June.
But the statewide unemployment rate worsened slightly, increasing to 4.6% in June, up from 4.5% in May.
“It’s not a surprise that the Bay Area’s job production continues, as many large employers are now taking a much more positive macro view of the economy,” said Jeff Bellisario, executive director of the Bay Area Council Economic Institute.
During the first half of 2023, the Bay Area lost 14,100 tech jobs, the Beacon assessment shows.
Those losses occurred primarily over the first three months of 2023 when tech companies shed a net total of 14,900 jobs. During the April-through-June quarter, tech companies actually added a tiny — but encouraging — 800 positions as they raced to harvest promising fields such as artificial intelligence and electric vehicles.
“The tech sector had to do some downsizing due to some over-hiring during the height of the pandemic,” Hancock said. “There was still some adjustment going on as we began the calendar year, but the second quarter numbers suggest tech has turned the corner.”
With tech still attempting to regain its footing in the Bay Area, the hotel, restaurant and drinking establishment sector added 5,500 positions and accounted for nearly 60% of all the jobs the region added in June, the Beacon Economics assessment determined. The sector added 2,500 jobs in Santa Clara County, 1,800 in the East Bay and 1,500 in the San Francisco-San Mateo region.
The strikes by Hollywood actors and writers eroded the job market statewide, particularly in Southern California, experts said.
“Job growth has slowed in the state over the past couple of months,” said Taner Osman, research manager at Beacon Economics. “This month’s job losses in Los Angeles are also noteworthy, following the strikes that are now occurring in the entertainment industry.”
Los Angeles County lost 3,900 jobs in June, the EDD reported.
“The strikes, which primarily affect the Los Angeles area, could act as a drag on state employment in the coming months,” Osman said.
Still, due to the June job gains, the Bay Area and all three of its major urban centers — the South Bay, East Bay and San Francisco-San Mateo region — now have a record number of jobs.
“The Bay Area labor market experienced a renaissance in the second quarter that clearly carried on into June,” said Scott Anderson, chief economist with Bank of the West. “Large company tech layoffs have subsided, while artificial intelligence hiring and investments may be becoming a new growth driver for the region.”
In another major benchmark, the Bay Area and its three big metro regions also now have erased the job losses they suffered at the onset of the coronavirus outbreak three years ago.
Even so, the Bay Area economy may have to navigate past some potential pitfalls due to the ominous backdrop of fast-rising interest rates and stubbornly high inflation.
“Monetary headwinds from Fed rate hikes remain very much in place,” Anderson said. “Consumer demand and job growth are expected to weaken further in the months ahead.”
But the overall trends for the job market in the Bay Area appear to be encouraging, at least for now.
“Our job numbers may not always progress in a straight line, especially when you watch them month-to-month, but our long-term trend is up and to the right,” Hancock said.
The Bay Area might be able to dodge a full-blown recession in the next year — although plenty of uncertainties loom that could doom those hopes.
“If inflation stays on this downward path, the chance for a ‘soft-ish’ landing for the Bay Area economy has improved,” Anderson said.
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