Both the Bay Area and California as a whole are recovering much better from the mammoth job losses caused by coronavirus-related business closures than first thought, state government officials said Friday.
A more rosy picture emerged as part of a report from the state Employment Development Department (EDD), which showed strong job gains in January and a revised, higher number of jobs for all of 2021.
The nine-county Bay Area added 16,500 jobs in January, according to an EDD report. Growth in the region was driven by strong employment growth in Santa Clara County and the San Francisco-San Mateo region.
In January, Santa Clara County added 3,600 jobs, the San Francisco-San Mateo metro area added 10,500 jobs, and the East Bay added 300 jobs, according to EDD. All figures have been adjusted for seasonal fluctuations.
California gained 53,600 jobs in January. The state’s unemployment rate stood at 5.8%, unchanged from December 2021.
In the annual period ending January 2022, California’s non-farm payrolls increased 7.4%, according to the EDD report, well above the 4.7% nationwide growth in the same 12 months.
“California’s economic recovery last year was unprecedented,” Gov. Gavin Newsom said Friday.
The Bay Area has chalked up a 7.2% increase in total payroll jobs over the last year.
The region’s annual growth was driven by a 9.7% increase in the San Francisco-San Mateo region and a 6.6% increase in Santa Clara County. Outperforming the nation, the East Bay’s 5.6% annual growth lagged behind both the Bay Area and California.
California added 1.05 million jobs during 2021, up 95,400 jobs from the original January estimate for the number of jobs California created last year. Similarly, the Bay Area added 235,500 jobs in 2021 in the nine-county region, up 20,600 jobs from the EDD’s original estimate.
Changes in job growth estimates during 2021 were presented as part of the annual EDD review for nonfarm payroll employment in California and all of its metropolitan areas.
According to Taner Osman, head of research at Beacon Economics and UC Riverside’s Center for Economic Forecasting, job growth could remain robust through the end of this year.
“With an abundance of job openings and more room for growth, we expect the California job market to continue outperforming the national economy in 2022,” Osman said.
While the business closures that began in March 2020 have resulted in huge job losses, the Governor believes the closure strategy was worth it in order to protect the health of Californians.
“Our approach has been to follow the scientific evidence while supporting those most affected by the pandemic,” Newsom said. “Not only has this saved tens of thousands of lives, it has gotten our staff back to work faster and better than the rest of the country.”
Despite job gains and improved employment in California, the state’s workers are still struggling due to rampant inflation that has devastated the economy.
The Bay Area inflation rate of 5.2% is the highest in more than two decades, while the nationwide inflation rate of 7.9% marks the biggest annual increase in four decades.
This will pose a major challenge for workers who are struggling to make ends meet, warned Michael Bernick, an employment lawyer at the law firm Duane Morris and a former director of the state’s EDD.
“Inflation has already weighed on wage growth in California, especially wage growth for low-income workers, and threatens to slow growth significantly,” Bernick said.
According to estimates made by Beacon Economics based on the EDD report, the technology sector saw significant job growth in January.
In January, tech companies added 5,200 jobs in the San Francisco-San Mateo region, 3,400 jobs in Santa Clara County and 2,100 jobs in the East Bay, according to seasonally adjusted data released by Beacon Economics. Some other sectors such as hotels and restaurants suffered losses.
The tech industry appears to be in great shape to continue growing employment in the Bay Area, said Steve Levy, director of the California Center for Continuing Economic Studies in Palo Alto.
“The skyrocketing job growth in 2021 was accompanied by a record $105.3 billion in Silicon Valley venture capital funding in 2021, providing the foundation for further job growth,” Levy said.
However, both California and the Bay Area have yet to recover all the jobs they lost in March 2020 and April 2020 in the first two months of the business shutdown.
“There is a lot of work to be done to restore the jobs that have been lost,” said Patrick Kallerman, vice president of research at the Gulf Council Economic Institute, “and get us back on a growth trajectory.”