The Bay Area economy added jobs at a sturdy 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 released Friday shows.
The employment gains in the Bay Area were robust enough that the nine-county region produced nearly 80% of all the jobs added in California in June, the state Employment Development Department reported Friday.
“The Bay Area economy rebounded in May and June with strong job growth,” said Steve Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy. “The June job total was the highest on record for the region and Silicon Valley.”
Robust gains in the Santa Clara County region helped power the Bay Area to a gain of 9,200 jobs in June, according to the state EDD’s regular monthly employment report.
It’s also clear that the tech layoffs that have hounded the region’s economy since early 2022 have tailed off in a big way, a Beacon Economics industry-specific analysis of the EDD report shows.
Bay Area tech industry job losses have eased at a dramatic pace during the most recent three months of 2023 compared with the first three months of this year, according to the Beacon analysis.
After losing jobs in March, the Bay Area’s job market has now gained employment for three consecutive months, although the increase in June was somewhat weaker than the upswing in May, the EDD report for the overall job sector shows.
“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.
The South Bay added 4,700 jobs in June, while the San Francisco-San Mateo region gained 3,100 jobs and the East Bay increased employment by 1,100 positions, 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 added a relatively puny 11,600 jobs — which means the Bay Area accounted for 79% of all the jobs added in the state last month. This also means that Santa Clara County alone produced 40% of the jobs added in California during June.
“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. “What is surprising is the slowing pace of California’s overall job growth.”
The statewide unemployment rate worsened and increased to 4.6% in June, up from 4.5% in May.
As a result of 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 have also now completely erased the job losses that 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.”
The overall trends for the job market in the Bay Area appear to be encouraging again, 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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