Rebounding at least temporarily from historic employment losses, the Bay Area in June powered to a record number of job gains for a single month, adding a mammoth 122,300 positions, officials reported Friday.
In June, as more businesses re-opened, Santa Clara County gained 37,200 jobs, the San Francisco-San Mateo region added 37,200 jobs,and the East Bay gained 27,300 jobs, the state’s Employment Development Department reported.
The strong numbers buoyed the confidence of some economists. “This is the start of the V-shaped recovery, there is no doubt about that,” said economist Christopher Thornberg, a founding partner with Beacon Economics. A V-shaped recovery is one in which an economy rebounds sharply from a steep downturn.
Despite these dramatic employment numbers, the Bay Area job market remains far weaker than it was in February, prior to the onset of the COVID-19 pandemic that prompted state and local government agencies to impose lockdowns on countless businesses. In addition, the Bay Area’s unemployment rates remain at near record highs.
Santa Clara County, long known as a powerful economic engine, is recovering its lost jobs at a far quicker pace than the Bay Area and California. Still, in the region, state and across the nation, the respective economies remain well below the employment levels they had achieved in February, prior to the government-imposed shutdowns.
“We still have a long way to go,” said Patrick Kallerman, research director with the Bay Area Council’s Economic Institute. “Some of those jobs may go away again as more counties appear on the governor’s watch list and businesses are shut down again.” Renewed shutdowns of businesses began this week as the state moved to curb the spread of the virus.
During March and April combined, the Bay Area lost 619,700 jobs, but during May and June, the region added back 161,900 positions. That means the Bay Area has regained only 26 percent of the jobs it lost during the two months of unprecedented employment setbacks.
“This is a hollow and partial victory at best,” said Scott Anderson, chief economist with Bank of the West. “Positive Bay Area job growth for June is better than no job growth, but because of the surge in virus cases, we are only looking into the rearview mirror.”
Santa Clara County has regained 31.3 percent of the jobs it lost in March and April, while the San Francisco-San Mateo region has recovered 23.9 percent of its vanished jobs, and the East Bay has regained 22.5 percent, according to this news organization’s analysis of the EDD’s statistics.
“The South Bay economy continues to show its relative strength due to its heavy technology company presence,” Anderson said.
During May and June, California managed to recover 26.4 percent of the jobs it had lost in March and April, which also lagged the pace of the South Bay rebound.
“The South Bay continues to out-perform the state,” said Jeffrey Michael, director of the Stockton-based Center for Business and Policy Research at the University of the Pacific. “High tech and low tourism is a good structure for avoiding the worst of the COVID-19 recession.”
For those reasons, tourism hub San Francisco appears to have lagged the South Bay.
“The areas that are really struggling are the ones that have the largest tourism sectors,” said Mark Vitner, a senior economist with Wells Fargo Bank. “San Francisco’s tourism sector hasn’t come back yet.”
California added a jaw-dropping 558,200 jobs during June, the EDD reported.
During the worst of the job losses in March and April, California shed 2.63 million jobs. During the two most recent months of recovery, May and June, the Golden State gained 692,400 positions. That means California still must add 1.93 million more jobs to fully overcome the losses during the first two months of shutdowns.
The California unemployment rate fell to 14.9 percent in June, an improvement from the 16.4 percent jobless rate in May, yet still brutally high by historic norms.
The jobless rate in June compared with May improved to 9.9 percent in Santa Clara County, down from 12.4 percent; 10.7 percent in San Francisco, down from 13 percent; and 12.3 percent in the East Bay, down from 14.9 percent, according to a Beacon Economics and UC Riverside analysis of the EDD report.
During June, the restaurant, hotel, and drinking establishment sectors added 17,000 jobs in the San Francisco-San Mateo region, 16,200 in the South Bay, and 11,500 in the East Bay, Beacon and UC Riverside determined. Those three industries produced more than 40 percent of the job gains for the month in each of those three large metro areas.
The health care industry in June added 8,700 jobs in San Francisco-San Mateo, 5,500 in Santa Clara County, and 4,000 in the East Bay. Construction companies added 5,600 jobs in the South Bay, 4,100 in the East Bay, and 2,600 in the San Francisco metro region.
All job figures have been adjusted for seasonal variations.
“I don’t think the business shutdowns that Gavin Newsom has ordered are doing much good,” Thornberg said. “This may be a case of shrug and get it over with. Protect those who need protection. Wear masks. Go out and live your life.”
Thornberg said some studies suggest the economy has a huge amount of pent-up demand on the part of consumers.
“As soon as the virus is out of the way, people will start spending money, and the economy will really take off,” Thornberg said. “The renewed business shutdowns are not going to turn this from a sharp recovery into a depression.”