The Bay Area added 800 jobs in October even as employers in California slashed thousands of positions overall, the state’s Employment Development Department reported Friday.
While the South Bay and San Francisco-San Mateo region each added several hundred jobs, the East Bay lost thousands, according to the report. Despite the upswing in Bay Area jobs in October, last month’s results were far weaker than the thousands of jobs added in the nine-county region in September.
“After another tepid jobs report, it’s clear that we’re just not in growth mode in the Bay Area,” said Jeff Bellisario, executive director of the Bay Area Economic Institute. “We would anticipate continued choppy trends through the remainder of the year, with the hope that 2025 brings more economic clarity.”
California employers cut 5,500 jobs in October, the state EDD reported. The numbers were adjusted for seasonal variations.
“Unfortunately, we can’t blame the weak California and Bay Area job numbers on the Florida hurricanes,” said Scott Anderson, chief U.S. economist with BMO Capital Markets. “There was a noticeable downshift in job creation in the lead-up to the national election.”
The statewide unemployment rate worsened to 5.4% in October compared with 5.3% in September. Last month’s jobless rate was California’s highest in nearly three years.
“The Bay Area economy is struggling today, despite great industries and workers,” said Steve Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy. “The outlook will get worse if new tariffs, anti-immigrant and large deficit policies are enacted.”
Despite recent layoffs, tech companies are adding jobs in certain sectors such as artificial intelligence — sometimes to a greater extent than staffing reductions. In October, the tech industry added thousands of workers and was one of the strongest industries in the region.
The tech industry’s rebound in the Bay Area was so robust in October that had it not been for the technology sector, the nine-county region would have shed jobs last month. Here is how certain key industries performed, according to seasonally adjusted figures that Beacon Economics compiled from the monthly EDD report:
— Tech companies added 2,200 jobs in the Bay Area in October. They added 2,200 jobs in the South Bay and 1,400 in the San Francisco-San Mateo region but slashed 1,000 jobs in the East Bay.
— Hotels and restaurants chopped 1,000 jobs. San Francisco-San Mateo lost 1,600 hotel and restaurant positions, while the South Bay lost 200. The East Bay added 600 hotel and restaurant workers.
— The administrative support industry lost 2,500 positions in October. These include clerical workers, secretaries, record-keepers and office workers. Administrative support jobs declined by 900 in the East Bay, 800 in the South Bay and 700 in the San Francisco-San Mateo region.
“We’re not booming, but we’re not shrinking either,” said Russell Hancock, president of Joint Venture Silicon Valley, a San Jose-based think tank. “That’s an achievement when you consider what’s been going on. There’s international instability, political uncertainty, fluctuating rates and inflation, and yet here we are adding jobs and stringing together consecutive months of positive growth.”
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The 5.4% unemployment rate for California was the highest level for that closely watched benchmark since December 2021 when the state was still attempting to recover from the aftermath of pandemic-linked shutdowns.
“Health care along with government are the two sectors that have propped up California employment over the past few years,” said Michael Bernick, an employment attorney with law firm Duane Morris and a former director of the state EDD. “These numbers should give the state Legislature pause and cause reflection on the complacency that it has adopted on ongoing job growth.”
Plenty of signs point to a drastic slowdown in the job markets for both the Bay Area and California, this news organization’s assessment of the regional and statewide job trends shows.
Over the 12 months that ended in October, the Bay Area added an average of 2,050 jobs a month, or 24,600 total. Over the first six months of that year, the average gain was 2,750. But over the most recent six months of the year-long period, the average gain shrank to 1,350 a month, a decline of 50.9% from the first half of the survey period.
California’s job market as a whole has also become progressively weaker.
During the year ending in October, California added 212,100 jobs, or an average of 17,675 a month. Over the first six months of the year-long period, the statewide job market added an average of 18,683 jobs a month.
Over the most recent six months, the average gain in California dwindled to 16,667 a month, or a decline of 10.8% from the first half of the 12 months.
BMO Capital Markets chief economist Anderson warns that job growth in the Bay Area and California will be weaker in 2025 than it is in 2024. Even so, Anderson is convinced the state will continue to add jobs, even if at a slower pace.
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“We think this is just a temporary setback for the economy, and modest job growth will continue in the months ahead” in the Bay Area and California, Anderson said.
The high-tech sector could be in good shape for the next few years in the wake of the industry’s wrenching layoffs, in Hancock’s view.
“Our tech companies went on an efficiency push, and it has paid off handsomely in terms of profitability,” Hancock said. “With money in their pockets and innovation around A.I. (artificial intelligence) heating up, all the conditions are right for hiring.”
— MJP
