Employers in the Bay Area, and California more broadly, generated robust job gains in March, a hiring upswing that — for now — counters the dismal job losses the nine-county region and the state endured in February.
The Bay Area gained 4,200 jobs last month, fueled by hiring surges in the South Bay and East Bay, according to a new state government report.
The region lost 3,500 jobs in February.
“Job gains are always welcome and remind us that the Bay Area economy is not in a ‘doom loop,’ ” said Steve Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy. “Also, I expect the Jan. 1, 2024, population estimates that will be released soon will show that population growth has returned statewide and in the Bay Area.”
The South Bay added 2,800 jobs in March, while the East Bay gained 900 positions, the state Employment Development Department (EDD) reported.
“Big picture, Silicon Valley continues to be where innovation meets opportunity, creating a dynamic landscape that attracts entrepreneurs, start-ups, tech giants and research institutions,” said Ahmad Thomas, chief executive officer of the Silicon Valley Leadership Group.
Tech companies lately have generated hefty revenue and harvested handsome profits in some cases — even while job cuts in the region continue in the sometimes-turbulent industry.
“There’s downsizing in some divisions and growth in others,” said Russell Hancock, president of Joint Venture Silicon Valley, a San Jose-based think tank.
The San Francisco-San Mateo region lost 500 jobs in March, according to the EDD. The metro area has now lost jobs for three consecutive months.
“San Francisco-San Mateo really stands out, not just this month, but over the past year,” said Jeffrey Michael, executive director of the Stockton-based Center for Business and Policy Research at the University of the Pacific. “It is the only one of California’s 29 metropolitan areas that lost jobs over the past 12 months.”
Some of the struggle may be because the area relies heavily on tech. The Bay Area’s job gains in March occurred despite — and not because of — the tech industry.
Tech companies slashed a net 2,900 jobs in March, according to a Beacon Economics estimate derived from the state report.
The San Francisco-San Mateo region generated the worst job losses in the tech sector. Tech companies chopped 2,800 jobs in March in the area. The South Bay lost 300 tech jobs, while the East Bay actually gained 200 tech jobs.
California gained a total of 28,300 jobs in March — a big improvement from the loss of 6,600 jobs in February.
The statewide unemployment rate remained unchanged at 5.3%. That figure is well above the record-low jobless rate of 3.8% in August 2022. Since that month, the California jobless rate has steadily worsened.
Ominously, California’s jobless rate was the highest of the 50 states. Even worse, Nevada’s 5.1% rate in March was the only other state with an unemployment level of 5% or higher.
Gov. Gavin Newsom’s Office of Business and Economic Development addressed the relatively high unemployment rate in California, saying it was “in line with the state’s 5% average prior to the pandemic from 2015 through 2019.”
Overall, the employment improvement in California was driven by sectors that depend on spending from social service agencies or public agencies, according to Michael Bernick, an employment attorney with law firm Duane Morris and a former director of the state EDD.
“The job growth for March in California, as in previous months, was primarily in health care and government,” Bernick said. In March, government employers added 13,600 jobs statewide, while health care organizations added 6,400 jobs in California.
The combination of government, health care and social assistance jobs gained in California accounted for 62.2% of the jobs added in March statewide.
“The other sectors that make up the private economy in California show little or no job growth,” Bernick said.
Bay Area health care employers added 1,400 jobs in March, paced by a gain of 500 health care positions in both the South Bay and the East Bay, Beacon estimated.
Retailers added 300 jobs in the Bay Area last month, according to the Beacon estimates.
Experts said the Bay Area remains poised for sturdy long-term growth if much-ballyhooed artificial intelligence companies create new ventures and capture enough success to be able to hire large numbers of tech workers.
“We’re seeing the emergence of artificial intelligence as a new economic driver,” Hancock said. “We see this in the deal flow, we’re seeing venture-funded AI companies leasing large blocks of commercial space, and as tech workers return to the region, we’re seeing population growth once again.”
