Both the Bay Area and California added jobs in April, however the gains were meager and paint an image of a threateningly weak labor market, a brand new report shows.
The nine-county Bay Area added just 300 jobs in April, the state Department of Employment Development reported Friday.
The modest recovery, which didn’t surprise some economists, was almost single-handedly led by the East Bay, which led to strong job gains. The South Bay was flat, while jobs were lost within the San Francisco-San Mateo region.
“The first part of 2024 has been as expected for the Bay Area economy,” said Jeff Bellisario, executive director of the Bay Area Council Economic Institute. “Our traditionally high-growth sectors are experiencing subdued growth, and our slow population growth has made hiring in locally operating sectors challenging.”
According to some experts, the weakness of the technology sector and the resulting layoffs have led to a weakening of the Bay Area economy.
“Our economy is in the midst of a transition away from the product lines that drove our growth during the pandemic and toward the new and untested area of artificial intelligence,” said Russell Hancock, president of Silicon Valley Joint Venture, a San Jose-based based think tank. “Considering that, we’re doing reasonably well.”
Here's how the Bay Area's seven metropolitan areas fared in April, as reported by the state EDD. All numbers have been adjusted for seasonal volatility:
— The East Bay added 2,600 jobs.
– The variety of employees within the South Bay remained unchanged.
— 1,700 jobs were lost within the San Francisco-San Mateo region.
– In the North Bay, Marin County gained 200 jobs, Napa County added 100 jobs, Sonoma County lost 600 jobs and Solano County lost 300 jobs.
“Weak job growth will likely continue to prevail in the Bay Area as long as the Fed keeps interest rates at these high levels,” said Scott Anderson, chief U.S. economist at BMO Capital Markets. “Interest rate-sensitive sectors such as construction, manufacturing and financial services are slowing hiring.”
In recent weeks, Tesla has notified state labor regulators of its decision to chop well over 3,300 jobs within the Bay Area. In April, the corporate announced plans to chop 2,753 jobs in Fremont and Palo Alto. Separately, for the primary time, Apple joins the ranks of tech corporations cutting jobs within the Bay Area in the present downsizing cycle – revealing plans last month to chop 614 jobs in Santa Clara.
The Bay Area lost a complete of two,300 tech jobs last month, this news organization's compilation of Beacon estimates shows. The company tracks the statewide and regional economy.
The San Francisco-San Mateo region suffered a net lack of 1,800 tech jobs, while the East Bay lost 400 tech jobs, in line with Beacon estimates. The South Bay saw no change within the variety of tech jobs in April.
“The ongoing layoffs in the tech industry over the last year and a half are now also putting a strain on professional and service sector jobs in the region,” Anderson said.
But there have been vivid spots in the roles report. Health care has been a key source of strength for the Bay Area, which added 3,400 health care jobs in April. Beacon estimates the sector has created 2,100 jobs within the East Bay, 800 within the San Francisco-San Mateo region and 500 within the South Bay.
So far this yr, the Bay Area has seen a net lack of 1,100 jobs, in line with this news organization's review of official 2024 employment reports.
But while the job losses are troubling, there are hopeful signs within the region's bleak economic landscape.
All of the Bay Area's employment declines to date in 2024 occurred in February, when the region lost 3,500 jobs. The Bay Area added 1,900 jobs in January, recovering from February's losses with a 200-job gain in March and the just-reported 300-job gain in April.
It has also been shown that the first reason behind the Bay Area's labor market weakness is the greater San Francisco area. The San Francisco-San Mateo region lost a complete of seven,000 jobs in each of the 4 months of 2024. But the South Bay has added 3,300 recent jobs during that period, while the East Bay has added 1,900 recent jobs to date.
According to EDD, California added an almost invisible 5,200 jobs statewide in April. The national unemployment rate remained unchanged at 5.3%.
The slight increase in jobs in California and the unemployment rate are nothing to have a good time, in line with Beacon Economics.
“California’s unemployment rate is the highest in the country and remains high compared to 3.9% in the United States overall,” Beacon said in an announcement.
Michael Bernick, an employment lawyer on the law firm Duane Morris and former director of the state EDD, also believes the brand new statewide labor market data suggests that California's employment sector has stalled.
“Job growth has stalled,” Bernick said. “California would have seen no employment gains except in the health care sector.”
And conditions within the Bay Area have gotten increasingly brutal, Bernick warned.
“Employment in the Bay Area will face challenges from state budget spending cuts as well as city and county budget cuts,” Bernick said, citing attempts to curb budget deficits on the local and state levels.
The economic stimulus programs that the federal and state governments launched to support the nationwide economy within the wake of the corona pandemic appear to have had their day.
“The Bay Area economy, like the economy of the rest of California, has been propped up by excessive public spending,” Bernick said.
Still, the Bay Area's job market — including the struggling tech industry — stays poised for solid long-term growth despite current uncertainties, experts say.
“In the long term, the outlook for the Bay Area job market is much brighter as more artificial intelligence companies launch and expand and related jobs are created online,” Anderson said.
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