Bay Watch: A Weekly Look into the Bay Area Economy
September 30, 2024
The East Bay led region’s job growth in August, while San Francisco lost jobs for the eighth consecutive month
The Bay Area added 1,100 jobs in August, a modest gain amid an economy still grappling with waves of tech layoffs and slow to recover service and retail sectors. These gains can be attributed to a surge of 1,800 new jobs in the East Bay, while the San Francisco subregion (which includes San Mateo County) lost 400 jobs — marking the eighth consecutive month of job loss for San Francisco. The South Bay lost 600 jobs — its third month of net job loss. The region is still down 58,000 jobs (or -1.4%) from pre-pandemic levels, with growth plateauing for most of 2024. The region continues to lag behind the state (employment up 2.1%) and the nation (employment up 4.2%).
As of August, there are only 500 fewer jobs than there were at the start of the year. Major gains in sectors like healthcare and education have been overshadowed by the ongoing restructuring in tech, as tech layoffs increased substantially from July to August. Despite ongoing concerns about a potential recession, the region’s recovery, though slower than its peers, shows some signs of improvement. Tech layoffs have dropped considerably compared to 2023, and while unemployment remains higher than pre-pandemic levels, rates are still well below the statewide average.
Bay Area unemployment remains elevated, but faring better than state overall
Unemployment in the San Francisco metro area (which includes San Francisco, the East Bay, the Peninsula, and Marin) and the San Jose metro area (which includes the South Bay)— remains elevated at 4.1%, aligning with rates observed in 2015, a year of considerable economic growth five years after the Great Recession. The Bay Area continues to outperform broader state unemployment trends, where the unemployment rate stands at 5.2%. California’s unemployment has stayed above 5% since September 2023, reflecting California's slow labor market recovery. If the San Jose and San Francisco metro areas were ranked as their own states, they would place 11th and 19th, respectively, in terms of unemployment rate. California would rank second, bested only by Nevada (5.5% unemployment).
This prolonged unemployment has begun to affect the state's budget deficit, but also the state's unemployment insurance fund, which was quickly exhausted during the pandemic. The state borrowed around $20 billion from the federal government to maintain payments, but remains one of only two states that has failed to repay these loans (New York still owes $6 billion). As California faces additional financial pressure, its economic recovery trajectory remains rocky.
Education and health continue to lead region's growth
The economic recovery of the Bay Area continues to be dominated by strong gains in education and health services (which includes which includes all private sector teachers, nurses, and other medical professionals), particularly driven by the East and South Bays (accounting for 76% of the region's growth in this sector, or 47,000 jobs overall). Retail trade continues to be the slowest to recover sector in the region, driven by the San Francisco subregion (accounting for 50% of the region's losses in this sector). Despite gaining a modest 3,200 jobs region-wide over the last 12 months, retail is still down 25,100 jobs.