Employers within the Bay Area and California more broadly reported strong employment gains in March, a hiring boost that — for now — counteracts the dismal job losses that the nine-county region and state suffered in February.
The Bay Area added 4,200 jobs last month, driven by a surge in hiring within the South Bay and East Bay, in response to a brand new state government report.
“Job gains are always welcome and remind us that the Bay Area economy is not in a 'bad luck loop,'” said Steve Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy. “In addition, I expect that the soon-to-be-released January 1, 2024 population estimates will show that population growth has returned statewide and in the Bay Area.”
The South Bay added 2,800 jobs in March, while the East Bay added 900 positions, the state Employment Development Department (EDD) reported.
“Broadly speaking, Silicon Valley continues to be the place where innovation meets opportunity, creating a dynamic landscape that attracts entrepreneurs, startups, technology giants and research institutions,” said Ahmad Thomas, CEO of Silicon Valley Leadership Group.
Tech firms have enjoyed strong sales and, in some cases, healthy profits of late – whilst job losses proceed across the region within the sometimes turbulent industry.
“There are reductions in some business areas and growth in others,” said Russell Hancock, president of Joint Venture Silicon Valley, a San Jose-based think tank.
The San Francisco-San Mateo region lost 500 jobs in March, in response to EDD. The metropolitan region has now lost jobs for 3 months in a row.
“San Francisco-San Mateo really stands out, not just this month but over the past year,” said Jeffrey Michael, executive director of the Stockton-based Center for Business and Policy Research on the University of the Pacific. “It is the only one of California’s 29 metropolitan areas to lose jobs in the last 12 months.”
Part of the issue may stem from the region's heavy reliance on technology. The Bay Area's employment gains in March got here despite — not due to — the tech industry.
Technology firms shed a net 2,900 jobs in March, in response to a Beacon Economics estimate derived from the state report.
The San Francisco-San Mateo region saw the worst job losses within the tech sector. Tech firms cut 2,800 jobs within the region in March. The South Bay lost 300 tech jobs while the East Bay actually added 200 tech jobs.
California added a complete of 28,300 jobs in March – a major improvement from the lack of 6,600 jobs in February.
The national unemployment rate remained unchanged at 5.3%. This figure is well above the record low unemployment rate of three.8% in August 2022. Since that month, California's unemployment rate has steadily worsened.
Worryingly, California's unemployment rate was the best of the 50 states. Even worse, Nevada, with an unemployment rate of 5.1% in March, was the one other state with an unemployment rate of 5% or higher.
Gov. Gavin Newsom's Office of Business and Economic Development addressed California's relatively high unemployment rate, saying it was “in line with the state's pre-pandemic average of 5% from 2015 to 2019.”
According to Michael Bernick, a labor attorney on the Duane Morris law firm and former director of the state EDD, overall employment improvement in California has been driven by sectors that depend on spending from social services or public agencies.
“March job growth in California, as in previous months, was primarily in health care and government,” Bernick said. In March, government employers added 13,600 jobs statewide, while healthcare organizations in California added 6,400 jobs.
The combination of presidency, health care and human services jobs added in California accounted for 62.2% of jobs added statewide in March.
“The other private sector sectors in California are seeing little to no job growth,” Bernick said.
Beacon estimates Bay Area healthcare employers added 1,400 jobs in March, reflecting a rise of 500 healthcare jobs in each the South Bay and East Bay.
Beacon estimates retailers added 300 jobs within the Bay Area last month.
Experts said the Bay Area continues to be poised for robust long-term growth as vaunted artificial intelligence firms launch recent ventures and achieve enough success to rent large numbers of engineers.
“We see the emergence of artificial intelligence as a new economic engine,” Hancock said. “We are seeing this in deal flow, we are seeing venture capital-backed AI companies leasing large blocks of commercial space, and as tech workers return to the region we are seeing population growth again.”
image credit : www.mercurynews.com