Bay Area lost thousands of jobs in October
The Bay Area lost thousands of jobs in October, but the South Bay and East Bay still managed to post employment gains, state labor officials said Friday.
The latest report from the state's Employment Development Department suggests that Santa Clara County remains a steady economic pillar of the Bay Area economy, while other areas may be sputtering.
Santa Clara County added 600 jobs and the East Bay gained 100, but losses of 1,000 jobs in the San Francisco-San Mateo region and a reduction of another 1,200 positions in Marin County were the main factors behind the Bay Area job loss during October, according to the EDD report. All the numbers were adjusted for seasonal variables.
“The tech sector is very strong and very impressive,” said Jeffrey Michael, director of the Stockton-based Center for Business and Policy Research at University of the Pacific. “But you are starting to see some slowdowns in some other non-tech industries.”
During October, the technology industry was particularly strong throughout the Bay Area, even in regions that suffered overall losses.
The Bay Area added 4,000 tech jobs in October as the nine-county region lost 2,000 jobs when all industries were taken into account, according to a Beacon Economics and UC Riverside analysis of the EDD's seasonally adjusted numbers.
“What's good to see is that some of the real mainstays of the economy such as technology are continuing to perform well in the Bay Area and California as we are closing out 2018,” said Robert Kleinhenz, an economist and executive director of research with Beacon Economics.
Santa Clara County gained 1,000 tech jobs, while the East Bay and the San Francisco-San Mateo region both added 1,300 tech jobs in their respective areas, the Beacon assessment determined.
“It's remarkable that the Bay Area is adding so many tech jobs with the labor market being as tight as it is,” said Mark Vitner, managing director and senior economist with San Francisco-based Wells Fargo Bank. “But tech may face some headwinds, when you see the weakness in the stock market and the political issues facing the industry.”
Among the weakest industries during October, according to the Beacon estimates: Hotels and restaurants shed 1,400 jobs both in the South Bay and the East Bay, while in the San Francisco metro area, financial services lost 1,000 positions and health care shed 900 jobs.
California added 36,400 jobs in October, and the statewide unemployment rate remained at 4.1 percent - which matched the lowest jobless rate in state records that go back to 1976.
“We have now had 103 months of employment expansion in California,” said Michael Bernick, a Milken Institute fellow and a former director of the state EDD. “That's the second-longest post-World-War-II expansion.”
Only a 113-month-long economic expansion in the late 1960s following Kennedy administration tax cuts exceeded the state's current growth upswing.
“There is no economic slowdown here in California yet,” said Sung Won Sohn, an economist who tracks the statewide and national economy. “The state labor market is still hot, creating 14.6 percent of all the jobs in the country. Construction and manufacturing are healthy.”
Primarily due to the technology industry, job creation in the Bay Area seems far more likely to expand rather than contract, experts said.
With the economic expansion now going on for years, experts are attempting to forecast how long the jobs boom might last in the Bay Area. The region's brutal housing market and devastating traffic woes would seem destined to eventually hobble the area's economy.
However, Kleinhenz noted that the labor pool in Santa Clara County is actually growing at a dramatic rate, which means the region is still attracting residents who want to live and work in the South Bay. In fact, the South Bay labor force is growing a head-spinning 10 times faster than California's labor pool.
Over the 12 months that ended in October, the South Bay labor force grew by 30,100, or a 2.8 percent increase. That compares with a 0.2 percent increase in the size of California's labor force. Over the same one-year period, the labor force grew 1.5 percent in the East Bay and by 1.6 percent in the San Francisco-San Mateo metro region.
“Clearly the recent economic success of the Bay Area and Santa Clara County serves as a magnet to draw people to come to work in this area,” Kleinhenz said.
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