The Recovery Gains Momentum and More Hopeful News
November 22, 2021
Bay Area job growth accelerated in September and October. At the same time VC funding has reached record levels, housing permits have begun to rebound, the Governor signed several housing bills and the region is a leader in vaccinations and lowering COVID cases. Congress passed an infrastructure bill and international travel restrictions have been eased. The Bay Area still faces challenges in housing, transportation and other areas that affect our economic competitiveness and, in doing so, reduce our ability to meet equity and environmental goals.
The highlights:
• The Bay Area added 178,600 jobs between January and October 2021 (+4.9%) outpacing U.S. gains (3.9%) for this period. The regional unemployment rate fell from 6.6% to 4.4%. Job gains were led by the San Francisco and San Jose metro areas
• The U.S. economy is recovering even as inflation and supply chain challenges remain and COVID cases are rising again. At the same time immigration and tourism are on pace to increase and some infrastructure spending could start next year.
• The region is a state and national leader in vaccinations and reducing COVID cases that is allowing a return to more normal living here.
• The long-term Bay Area economic challenges remain with only slow progress on housing, transportation and economic competitiveness, challenges at the front of the Bay Area Council policy agenda.
Job Growth is Steady but Disappointing Compared to the Nation
The Bay Area added 178,600 jobs since January 2021 led by a gain of 73,400 in the San Francisco metro area though SF has recovered just 53.4% of the jobs lost between February and April 2020 as job gains are offset by companies moving jobs out of SF. The San Jose metro area added 55,100 jobs but by October had recovered 66.0% of the jobs lost between February and April 2020. The San Jose, Napa, and San Rafael metro areas had the largest % job recovery by October August 2021.
Job growth accelerated in the past two months with gains of 21,100 jobs in October and an upward revised 18,200 jobs in September. There were strong gains in Professional and Business Services as well as a continuing recovery in Leisure and Hospitality.
The Bay Area Had Recovered Just 57.5% of Lost Jobs by October 2021 Yet VC Funding is Surging and Tech Jobs Are Above Pre-Pandemic Levels
In October 2021 the Bay Area had recovered 57.5% of the jobs lost between February and April 2020 up from 29.4% in January. The state had recovered 67.4% up from 34.0% while the nation had recovered 81.3% of lost jobs up from 55.4%. At the same time VC funding in the first three quarters of 2021 was the highest on record. The Bay Area lagged the nation in 2020 job performance but has outpaced the nation in job growth so far in 2021 (4.9% versus 3.9%).
Unemployment Rates Fell to 4.4% in the Region in October 2021 from 6.6% in January 2021.
The lowest rates were in the San Rafael metro area (3.4%) followed by the San Francisco and San Jose metro areas (3.8%) in October 2021.
Industries Were Affected Differently
The Information sector actually added jobs compared to before the pandemic hit. And the Professional & Business Services sector is also above pre-pandemic job levels. On the other hand, the Leisure and Hospitality sector recovered only 55.0% of lost jobs by October 2021 though travel and tourism are now picking up again. The Government sector has fewer jobs now than in April 2020 though many jobs may be returning as schools and colleges reopen. The Construction and Manufacturing sectors have recovered most of the jobs between February and April 2020.
Housing Permits Up Over 2020 Levels, Trail 2019 Slightly
Housing permit levels are up over 2020 in the first nine months of 2021 but still slightly trail 2019 comparable months. But recently many new developments have been approved or proposed in places like Oakland and San Jose and in other cities as well as new developments being proposed.
Bay Area COVID Stats
The top eight counties in terms of vaccination %s (all but Solano) are from the Bay Area with all having more than 75% first doses and six having more than 70% fully vaccinated. The Bay Area has by far the lowest number of new cases per capita and all 9 Bay Area counties are in the 15 counties with the lowest recent per capita cases are in the Bay Area.
Large Challenges Remain:
We have the paradox of continuing reports of headquarters’ relocations outside of the region at the same the region is capturing record VC funding levels and tech jobs are slightly above pre-pandemic levels. Yet, the Bay Area Council warnings about losing our competitiveness remain as housing and mobility challenges are far from solved—the major causes of recent movements of companies and residents.
The rebound from pandemic related economic losses will continue but new policies are needed to maintain and improve the long-term competitiveness of the Bay Area economy. There is now increased movement to integrate our many transportation systems and agencies and pursue fare integration in an effort both to improve but to maintain the solvency of our main public transit options.