Bay Area adds jobs in July — but pace of job gains slows drastically

Region loses hospitality jobs, gains high-tech positions

The Bay Area added thousands of jobs last month, fueled by the tech sector, though the rate of regional job growth slowed significantly from earlier in the year, state labor officials reported Friday.

According to a new report released by the state Employment Development Department, the nine-county region gained 3,900 jobs in July, fueled primarily by a strong uptick in the East and South Bays.

“So far, the labor market slowdown in the Bay Area and California appears to be more of a cool down than the start of a sharp economic downturn,” said Scott Anderson, chief economist at Bank of the West. “However, job growth in the Bay Area appeared to cool more than the rest of the state last month.”

The East Bay gained 2,900 positions, while the South Bay gained 2,100. The San Francisco-San Mateo region, on the other hand, lost 2,000 jobs, according to the state. Seasonal volatility was factored into all of the figures.

The South Bay has now added jobs for 30 straight months, even during the worst of the numerous rounds of tech layoffs that have plagued the Bay Area since early 2022.

“For Silicon Valley, the big picture is that this economy has had a remarkable two-and-a-half-year run of positive growth,” said Russell Hancock, president of the San Jose-based think tank Joint Venture Silicon Valley.

The last time the South Bay experienced a net job loss was in January 2021.

“The South Bay continues to demonstrate relative economic strength, particularly in comparison to San Francisco, where concerns about crime, homelessness, and office vacancies are putting downward pressure on the city’s near-term employment trajectory,” said Jeff Bellisario, executive director of the Bay Area Council Economic Institute.

The Bay Area added 3,900 jobs in July, following a 9,700-job increase in June. Both of these figures are significantly lower than the solid gains of 12,400 jobs in April and 12,600 in May.

Even though job creation is slowing, the Bay Area, South Bay, East Bay, and San Francisco-San Mateo regions all have more jobs in July than they did in February 2020, the final month before state and local government officials imposed widespread business shutdowns to combat the coronavirus.

In July, the tech sector drove much of the improvement in the Bay Area job market. According to a Beacon Economics analysis of seasonally adjusted data compiled by the state, high-tech firms added 1,800 jobs in the Bay Area. According to the Beacon figures, the Bay Area’s tech gains were led by a significant increase in tech hiring in the South Bay.

“Tech layoffs have decreased significantly, and the sector is adding jobs again,” said Jeffrey Michael, executive director of the University of the Pacific’s Center for Business and Policy Research in Stockton.

According to Beacon Economics, the high-tech industry added 1,000 jobs in the South Bay, 700 in the East Bay, and 100 in the San Francisco-San Mateo region.

According to the state EDD, California added 27,900 jobs in July. The statewide unemployment rate was 4.6%, the same as in June. However, the current California unemployment rate is significantly higher than the state’s record-low levels in the summer of 2022.

California had its lowest unemployment rate on record in July and August 2022, at 3.8%. Since that record low in August of last year, the statewide unemployment rate has risen steadily over the next 11 months.

“California’s payroll job gains continue to slow from the job growth of 2022 and the first quarter of 2023,” said Michael Bernick, a former EDD director and employment attorney with law firm Duane Morris. He added that “job growth has slowed across all sectors” in the state.

According to the Beacon Economics survey, hotels, restaurants, and drinking establishments had a strong month of hiring in July, adding 5,700 jobs in California.

According to Beacon, Bay Area hotels, restaurants, and drinking establishments cut 2,600 jobs in the region. There were net job losses of 1,100 in the South Bay, 1,000 in the San Francisco-San Mateo region, and 800 in the East Bay.

California’s job totals increased by 2% over the most recent one-year period, which ended in July, but this trailed the increase for the Bay Area and its three major urban centers over the same year-long period.

According to this news organization’s analysis of the EDD report, job totals in the Bay Area increased by 2.5% over the last year, 2.8% in the San Francisco-San Mateo region, 2.5% in the South Bay, and 2.4% in the East Bay.

Overall, it appears that the Bay Area and Silicon Valley have been able to withstand the jolts that the region’s tech industry layoffs have unleashed.

“Despite a wave of tech layoffs, the Silicon Valley economy has outpaced the state and the nation,” said Hancock of Joint Venture Silicon Valley. “I suspect that this will continue.”

According to Steve Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy, the Bay Area is also overcoming challenges such as a lack of affordable housing and traffic congestion.

“While the next few months may be challenging,” Levy said, “the continued return to the office, gains in travel and hospitality, and promising prospects for electric vehicles, artificial intelligence, and clean energy point to a future of resilience and job growth.”