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California and San Francisco Bay Area Saw Job Losses in February

Autor: CPA Practice Advisor

By George Avalos, The Mercury News (via TNS).

The Bay Area and California both lost thousands of jobs during February, a disquieting report that raises questions about the strength of the economy in the state and this region.

The job losses in the nine-county region and statewide suggest that the hiring boom that began in the final few months of 2023 and extended into January of this year has been interrupted, at least for now.

The Bay Area lost 4,200 jobs in February, according to a state Employment Development report released Friday.

The employment reductions in the nine-county region were triggered primarily by job losses in the tech industry and in construction. Bay Area hotels, restaurants and healthcare firms added jobs in February at a brisk pace, according to a Beacon Economics assessment of the state EDD reports.

“The Bay Area continues to be the epicenter of job loss in California,” said Scott Anderson, chief U.S. economist for BMO Capital Markets.

California shed 3,400 jobs last month, a setback that terminated six straight months of employment gains statewide, the EDD estimated.

The statewide jobless rate worsened to 5.3% in February, up from 5.2% in January, according to the EDD monthly report.

The latest state unemployment figures are far worse than California’s record-low unemployment rate of 3.8%, which occurred well over a year ago, in August 2022.

All three of the Bay Area’s largest metro centers lost jobs in February. Here’s how they fared:

— The South Bay lost 100 jobs in February.

— The East Bay shed 2,400 jobs last month.

— The San Francisco-San Mateo region lost 1,000 jobs in February.

All of the numbers were adjusted for seasonal variations.

In a distressing turn of events, the new EDD report revealed that the job gains officials reported for January were far weaker than first thought.

Rather than gaining 13,600 jobs in January as initially estimated, the Bay Area added only 1,900 positions.

Similarly, California originally was thought to have added a robust 58,100 jobs in January. It turns out the state’s job gains in January were 25,600 positions — less than half the initial EDD estimate.

Here are the jobs gained or lost for some crucial Bay Area industries in February, according to seasonally adjusted estimates that Beacon Economics derived from the official EDD reports:

— Tech companies chopped a net total of 3,200 jobs in February.

— Construction companies slashed 4,500 jobs last month.

— Hotels and restaurants gained 2,200 jobs.

— Healthcare employers added 1,800 positions.

— Retailers added 300 jobs.

The tech industry losses were particularly severe in the South Bay, which lost 1,700 tech jobs in February, according to the Beacon estimates. The East Bay lost 700 tech jobs while the San Francisco-San Mateo region shed 500 tech jobs.

Tech companies such as Facebook app owner Meta Platforms, Google, Cisco Systems, Salesforce and Intel have slashed jobs in a quest to operate more efficiently after they staged huge hiring sprees during the two years of remote work resulting from the coronavirus-linked business shutdowns.

The huge staffing reductions for construction workers, including construction sector losses of 1,700 in the South Bay, 1,300 in the East Bay and 1,000 in the San Francisco-San Mateo region are occurring at a time of turmoil for both the residential and commercial real estate industries.

Sky-high interest rates and soaring office vacancies have coalesced to make it difficult to build new offices and apartments. The elevated interest rates make it more costly for developers to obtain and repay construction loans.

On a more hopeful note for local industries, the hotel and restaurant sectors continue to hire in a big way. Lodging and dining operators added 700 jobs in the South Bay, 600 in the East Bay and another 600 in the San Francisco-San Mateo region.

With the end of business shutdowns and travel restrictions, experts believe people are seeking to travel more and dine in restaurants with greater frequency.

Plus, conventions are on the rise. This week, Nvidia staged a conference with a primary theme being the fast-rising artificial intelligence sector, an event that was based in downtown San Jose. The Nvidia event attracted throngs of employees, AI industry leaders and entrepreneurs, which bolstered hotels and restaurants in the downtown district.

©#YR@ MediaNews Group, Inc. Visit at mercurynews.com. Distributed by Tribune Content Agency, LLC.

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