- As highlighted at Pacific Union’s Real Estate and Economic Forecast to 2020 last week, job creation has been a primary driver of Bay Area housing market trends. In October, the Golden State’s solid jobs gain continued with 31,700 jobs added according to the latest numbers from the California Employment Development Department, following a strong addition of 50,300 jobs in September.
- California’s unemployment rate further declined by 0.2 percentage points to 4.9 percent despite the state’s growing labor force. The labor force increased by 1 percent year over year, which is the fastest annual growth in 2017 in California. The labor-force growth is encouraging, as it suggests that some workers are still encouraged to come to California despite high housing costs. In the first three quarters of 2017, Los Angeles had the largest relative increase in the labor force among the state’s more populous counties, with a 1.5 percent increase or 1.37 million new workers. Napa, San Francisco, and San Mateo counties follow with 0.81 percent, 0.79 percent, and 0.72 percent increases, respectively.
- While September’s jobs increase was boosted by back-to-school employment, October trends reverted to ones seen earlier in the year, namely growth in the leisure and hospitality and health care sectors.
- The sectors that led job growth include leisure and hospitality, with 15,300 jobs added, and health care, with 9,600 jobs added. Other sectors that posted gains include government; professional, scientific, and technical services – the main sector that reverted from September loses; transportation; warehousing; and utilities.
- Among sectors that shed jobs were administrative support services, other services, and information and educational services.
- In the Wine Country, while the impact of the recent wildfires was not yet fully evident, preliminary data shows a loss of 1,300 jobs in Sonoma County in October from the month before and a loss of 900 jobs in Napa County. On an annual basis, both counties saw an increase in the number of jobs.
- In Sonoma County, most of the monthly decline came from the manufacturing, financial activities, and leisure and hospitality sectors. And while the first two industries have seen job declines over the last year, the drop in the leisure and hospitality industry was impacted by October’s fires. On an annual basis, there was a 1,200-position increase in leisure and hospitality jobs. In Napa, the decline in jobs was driven by losses in the professional and business services sector, and there were no losses in leisure and hospitality jobs. November’s numbers will be more telling of the wildfires’ impacts on the job market. There was no change in construction jobs in either county in October.
- San Francisco and San Mateo counties posted an overall increase of 5,000 jobs from September, showing solid improvement over previous months. The education sector continued to gain jobs in October, with a 10.8 percent increase in private and public institutions. The professional and business services sector showed a gain from September, though on an annual basis it lost 4,200 jobs.
- In Silicon Valley, employment gains were also solid, with 9,600 jobs added from September and 15,300 jobs added over the last year. Strong job growth led the unemployment rate to drop to 3 percent in Santa Clara County, which is the second lowest since May of this year. While the job gains were broad across sectors, educational services again led the increase, following by professional and business services. On an annual basis, the trade and transportation and mining and construction industries saw the most losses.
- The East Bay similarly benefited from added education jobs. The unemployment rate in Alameda and Contra Costa counties combined further declined to 3.4 percent from 3.8 percent in September. The East Bay region added 8,400 jobs from September and 11,900 over the last year. Over the last year, the strongest growth was seen in the educational and health care sectors, followed by construction jobs. Since September, the leisure and hospitality industry lost 2,500 jobs but is still in positive territory on an annual basis.
- In October, Los Angeles County showed vigorous employment growth, with 35,100 jobs added from the month before and 40,400 jobs created over the last year. The county’s unemployment dropped to 4.7 percent from 4.9 percent in September and 5.1 percent from last October. The largest annual increases was in the educational and health services sectors, with health care and social assistance leading the gains. While most other sectors showed annual growth, the information and manufacturing sectors lost jobs over the last year.
Selma Hepp is Pacific Union’s Chief Economist and Vice President of Business Intelligence. Her previous positions include Chief Economist at Trulia, senior economist for the California Association of Realtors, and economist and manager of public policy and homeownership at the National Association of Realtors. She holds a Master of Arts in Economics from the State University of New York (SUNY), Buffalo, and a Ph.D. in Urban and Regional Planning and Design from the University of Maryland.
(Promotional photo: iStock/valentinrussanov)