The Bay Area and California both added jobs in April, but the gains were puny and sketch a picture of an ominously feeble employment market, a new report shows.
The nine-county Bay Area added just 300 jobs in April, the state Employment Development Department reported Friday.
The modest upswing, which did not surprise some economists, was led almost single-handedly by the East Bay, which powered to healthy job gains. The South Bay was flat while the San Francisco-San Mateo area lost jobs.
“The first part of 2024 has played out as expected for the Bay Area economy,” said Jeff Bellisario, executive director of the Bay Area Council Economic Institute. “Our traditionally high-growth sectors are experiencing muted growth, and our slow population gains have made hiring a challenge in local-serving sectors.”
The weakness of the tech sector and its accompanying layoffs have coalesced to weaken the Bay Area economy, some experts believe.
“Our economy is in the throes of a transition, away from the product lines that fueled our growth during the pandemic and into the new and untested realm of artificial intelligence,” said Russell Hancock, president of Joint Venture Silicon Valley, a San Jose-based think tank. “Given all of that, we’re doing quite reasonably well.”
Here’s how the Bay Area’s seven metro regions fared in April, as reported by the state EDD. All of the numbers were adjusted for seasonal volatility:
— The East Bay gained 2,600 jobs.
— The South Bay’s employment totals were unchanged.
— The San Francisco-San Mateo region lost 1,700 jobs.
— In the North Bay, Marin County gained 200 jobs, Napa County added 100 positions, Sonoma County lost 600 jobs and Solano County shed 300 jobs.
“Lackluster job growth will likely continue to hold sway in the Bay Area as long as the Fed keeps interest rates at these high levels,” said Scott Anderson, chief U.S. Economist for BMO Capital Markets. “Interest-rate-sensitive sectors like construction, manufacturing and financial services are scaling back on hiring.”
The tech sector, for decades the Bay Area’s most important economic engine, shed thousands of jobs in April, according to a Beacon Economics analysis of the EDD’s report.
In recent weeks, Tesla notified state labor officials of its decision to slash well over 3,300 jobs in the Bay Area. In April, the company announced plans to cut 2,753 jobs in Fremont and Palo Alto. Separately, Apple for the first time joined the ranks of tech companies cutting Bay Area jobs in the current downsizing cycle — revealing last month plans to chop 614 jobs in Santa Clara.
The Bay Area lost a total of 2,300 tech jobs last month, this news organization’s compilation of the Beacon estimates shows. The firm tracks the statewide and regional economies.
The San Francisco-San Mateo region suffered a net loss of 1,800 tech jobs, while the East Bay lost 400 tech jobs, the Beacon estimates show. The South Bay experienced no changes in its tech job totals in April.
“Steady technology industry layoffs over the past year and a half are also now weighing on the region’s professional and business services jobs,” Anderson said.
But there were bright spots in the jobs report. Health care was a major source of strength for the Bay Area, which added 3,400 health care positions in April. The sector added 2,100 jobs in the East Bay, 800 in the San Francisco-San Mateo region and 500 in the South Bay, according to the Beacon estimates.
So far this year, the Bay Area has a net loss of 1,100 jobs, this news organization’s review of the official employment reports for 2024 shows.
Yet while the job losses are unsettling, hopeful signs are visible in the region’s gloomy economic landscape.
All of the employment declines for the Bay Area so far in 2024 occurred in February when the region lost 3,500 jobs. The Bay Area added 1,900 jobs in January and rebounded from the February losses with a gain of 200 positions in March and the just-reported increase of 300 jobs in April.
It’s also become apparent that the primary source of weakness for the Bay Area job market is the San Francisco metro area. The San Francisco-San Mateo region has lost jobs each of the four months in 2024 for a total of 7,000 to date. But the South Bay has gained 3,300 over that timeframe, while the East Bay has added 1,900 jobs so far.
Statewide, California added a nearly invisible 5,200 jobs in April, the EDD reported. The statewide unemployment rate remained unchanged at 5.3%.
The tiny upswing in California jobs, as well as the unemployment rate, aren’t a cause for celebration, according to Beacon Economics.
“California’s unemployment rate is the highest in the nation and remains elevated relative to the 3.9% rate in the United States as a whole,” Beacon said in a statement.
Michael Bernick, an employment attorney with law firm Duane Morris and a former director of the state EDD, also thinks the new statewide jobs data suggests California’s employment sector has faltered.
“Job growth ground to a halt,” Bernick said. “California would not have registered any job gains, except for the health sector.”
And conditions in the Bay Area look increasingly brutal, Bernick warned.
“Employment in the Bay Area will be challenged by the spending reductions in the state budget, as well as the reductions in city and county budgets,” Bernick said, referring to attempts to curb budget deficits at local and state levels.
The stimulus programs that the federal and state governments developed to steady the nation’s economy in the wake of the coronavirus pandemic appear to have run their course.
“The Bay Area’s economy, like the economy of the rest of California, has been propped up by outsized public spending,” Bernick said.
Still, despite current uncertainties, the Bay Area job market — including the battered tech industry — remains poised for sturdy long-term growth, experts say.
“Longer term, the Bay Area labor market outlook is much brighter as more artificial intelligence companies are formed and expand and related jobs come online,” Anderson said.
