Led by a hiring boom within the South Bay, the Bay Area posted big job gains in May, banishing – a minimum of for now – the grim outlook of a weak labor market and job losses that plagued the region earlier within the 12 months.
The nine-county region added 7,000 latest jobs in May, the best number since December 2023, when 11,200 jobs were created within the region, the state employment agency said Friday.
The increase in Bay Area hiring in May got here despite massive layoffs within the region's technology industry, particularly within the San Francisco metropolitan area.
The South Bay saw job growth of three,300 positions, nearly half of all latest hires within the Bay Area in May, in accordance with the state Department of Employment Development.
In the San Francisco-San Mateo region, 1,000 jobs were created, the EDD reported.
In California, 43,700 latest jobs were created in May and the variety of non-farm jobs also reached a brand new record at over 18 million.
Both the California and Bay Area figures have been adjusted for seasonal volatility.
“The labor market in California and the Bay Area firmed in May after a series of disappointing employment reports, rekindling expectations for a soft landing for the Bay Area economy after two years of higher interest rates and rapid inflation,” said Scott Anderson, chief U.S. economist at BMO Capital Markets.
The national unemployment rate was 5.2% in May, an improvement from 5.3% in April.
The improvement marked the primary decline within the national unemployment rate in nearly two years. In August 2022, the national unemployment rate reached a record low of three.8%. It had been steadily worsening until the advance in May.
“The labor market trend has been good enough to calm nerves in Sacramento and increase the chances that expansion in the Bay Area will continue to be sluggish in the coming months,” Anderson said.
Here's how some key industries within the Bay Area fared in May, in accordance with seasonally adjusted numbers that Beacon Economics derived from the EDD's official report:
— Technology corporations cut their jobs by 2,100. The San Francisco-San Mateo region lost 2,200 jobs and the South Bay lost one other 400. The East Bay added 600 jobs.
— In the Bay Area, 1,300 latest jobs were created within the hospitality sector. In San Francisco-San Mateo, 800 jobs were created, and within the South Bay, 400.
— Financial services added 1,700 jobs within the Bay Area, primarily resulting from a rise of 1,000 within the greater San Francisco area and 600 within the East Bay. This sector includes banks and other financial firms, insurance firms and real estate firms.
— Health care corporations added 1,200 jobs within the Bay Area in May. The South Bay added 1,000 latest health care jobs last month, in accordance with the Beacon estimate.
“In the Bay Area, the volatile technology and information sectors are still negative, with growth concentrated in hospitality, healthcare and government,” said Jeffrey Michael, executive director of the Stockton-based Center for Business and Policy Research on the University of the Pacific.
It has change into clear that the Bay Area's post-coronavirus recovery is lagging behind that of California as a complete.
In May, the state had a complete of 18.03 million wage and salary jobs, up 1.2 percent from February 2020, the last month before government-imposed business closures to contain the spread of coronavirus went into effect.
Yet employment within the Bay Area and its three major urban centers are all below their pre-COVID levels.
Here's what this news organization's evaluation of the EDD report shows regarding the Bay Area's post-coronavirus employment recovery. The numbers compare May 2024 numbers to February 2020 levels:
– The Bay Area is 1.3% below February 2020 levels, meaning there’s an employment deficit of 53,300.
– The South Bay is 0.2% below pre-COVID levels, or 1,800 jobs missing.
– The East Bay is 0.3% below, which corresponds to a niche of three,200 jobs.
– The San Francisco-San Mateo region is 3.7% below its pre-coronavirus total, representing a staggering deficit of 44,300 jobs.
Over the past 12 months through May, jobs within the East Bay increased 0.9 percent, while jobs within the South Bay and the Bay Area increased 0.5 percent.
In contrast, the whole variety of jobs in San Francisco-San Mateo fell by 0.5% over the identical period.
According to Michael, the San Francisco-San Mateo metropolitan area is “the only one of California’s 29 metropolitan areas that has lost jobs in the past 12 months.”
In the primary five months of 2024, 6,400 jobs were lost within the San Francisco metropolitan area. Until the May increases, the San Francisco region had lost jobs every month this 12 months.
The Bay Area's massive net hiring of seven,000 staff in May provided a hopeful counterpoint to the gloomy trends of the primary 4 months of the 12 months.
The Bay Area lost 600 jobs from January to April, but May's rebound means the Bay Area added 6,400 latest jobs in the primary five months of 2024.
During the identical five-month period, 3,600 latest jobs were created in East Bay.
However, the South Bay is the foremost driver of the Bay Area job market in 2024. In the primary five months of the 12 months, the South Bay added 7,500 jobs and lost jobs in only one month, February.
According to Russell Hancock, president of Joint Venture Silicon Valley, a San Jose-based think tank, the assorted trends suggest that the South Bay maintains its top-notch status as a job engine despite the tech sector's well-known boom-and-bust cycles.
“May's job growth is consistent with our long-standing understanding of Silicon Valley,” Hancock said. “We are an innovation-based ecosystem that creates new products, new services, new business models and even new industries. There will always be cycles, and the bottom of the cycle brings painful adjustments.”
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