The Bay Area saw a jump in job gains in June, largely driven by the East Bay recovery but offset by job losses within the region's technology-dependent South Bay and San Francisco.
Employers within the Bay Area added 2,200 recent jobs in June, in keeping with a report released Friday by the U.S. Bureau of Labor Statistics.
California added 22,500 recent jobs in June. The statewide unemployment rate was unchanged from May at 5.2% and was barely higher than the 5.3% unemployment rate reported for California for February, March and April.
In the primary half of 2024, 7,400 recent jobs were created within the Bay Area, largely because of regular gains over the six months within the South Bay and East Bay.
So far this 12 months, the South Bay has added 5,300 jobs, while the East Bay has added 6,300. In contrast, the San Francisco-San Mateo region lost 3,500 jobs in the primary half of 2024 and has laid off employees every month this 12 months.
“Elon Musk's announcement last week that he will move X (Twitter) out of San Francisco, among other things, completes the hollowing out of the once vibrant tech hub in San Francisco's mid-market area,” said Michael Bernick, an employment attorney with the Duane Morris law firm and former director of the state Department of Employment Development.
But the cuts at X (Twitter) are only the most recent in a series of setbacks that tech cuts have inflicted on the greater San Francisco area.
“X's exit completes the exodus that Uber initiated in 2019, followed by Block, formerly Square, in 2022 and Reddit in 2023,” Bernick said. “Thousands of tech jobs have disappeared or will continue to disappear from San Francisco,” he added.
However, despite the sharp weakness in San Francisco's employment sector to date, the Bay Area's overall labor market appears to be starting to point out an upturn in 2024, said Scott Anderson, chief U.S. economist at BMO Capital Markets.
“After a mixed first quarter, Bay Area job growth picked up in the second quarter,” Anderson said. “It appears that the economic gloom is beginning to lift across the state and even in the Bay Area.”
In the primary three months of 2024, 1,400 jobs were lost within the Bay Area. However, within the second quarter from April to June, 8,800 recent jobs were created within the nine-county region, in keeping with seasonally adjusted figures from the Federal Employment Agency.
This pattern was also evident in California's labor market, in keeping with the federal government report.
In the quarter from January to March, 37,200 recent jobs were created in California, in comparison with 69,900 within the period from April to June.
According to this news organization's evaluation of the federal government report, California added 107,100 recent jobs in the primary six months of 2024. All figures are seasonally adjusted.
Still, California's unemployment rate has steadily worsened because the state hit its record low of three.8% in August 2022.
Despite the uneven labor market situation within the Bay Area, the economy of the nine-county region stays well positioned for the long run – at the very least not if it may possibly get a handle on some long-term problems which have plagued the region for years, says Steve Levy, director of the Center for Continuing Study of the California Economy in Palo Alto.
“The Bay Area has the potential for continued job growth because we have a strong manufacturing base here,” Levy said. “But success will depend on an increase in housing construction, a continued increase in immigration and the onset of lower interest rates.”
The labor market may very well be difficult for the remaining of 2024, experts warn.
However, if inflation does cool down and the Federal Reserve allows lower rates of interest, the employment situation could improve next 12 months.
“June's employment data points to a soft landing for the Bay Area economy, with inflationary pressures continuing to ease. This is the perfect environment for Fed rate cuts and a rebound in job growth next year,” Anderson said.
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