The East Bay economy continues to gain momentum, adding 2,500 jobs in July and extending a hiring surge that has produced steady job gains in recent months, state labor officials reported Friday.
The job gains in the East Bay, led by more restaurant and hotel jobs, helped propel the Bay Area to an increase of 4,400 jobs. The San Francisco-San Mateo-Marin region added 5,100 jobs, while Santa Clara County suffered a loss of 2,800 jobs, the Employment Development Department reported. All the numbers were adjusted for seasonal changes.
The employment upswing in the East Bay, which has produced job gains for five of the past six months, is a welcome recovery from the severe downturn for the region during the housing bubble and financial crisis.
Despite the setback for Santa Clara County, it's not time to push the panic button, analysts said.
"The economy is not in trouble in Santa Clara County," said Scott Anderson, chief economist with San Francisco-based Bank of the West. "The job loss is primarily because of a larger-than-average decline in government employment."
The South Bay lost 1,700 government jobs in July, mainly from a reduction of 1,500 local government jobs as public school employees departed their campuses for the summer, according to a Beacon Economics analysis of the EDD figures.
Nevertheless, the pace of hiring in Santa Clara County isn't as robust as it has been.
"There is no doubt that Santa Clara job growth is slowing down from the pace of recent years," said Jeffrey Michael, director of the Stockton-based Business Forecasting Center at University of the Pacific.
Some analysts believe the tech sector throughout the Bay Area could be settling into a period of steady rather than spectacular hiring. "The fundamentals for tech are still very strong, but we may be at the top of the cycle," said Mark Vitner, senior economist with Wells Fargo Securities. "It doesn't mean we are headed for a dramatic decline."
Analyst Tim Bajarin, who tracks the technology sector, said there's no evidence of a major let up for high-tech employment, products and services.
"We haven't seen any softening in hiring," said Bajarin, president of Campbell-based Creative Strategies. "You look at the message boards for Google, Apple, Intel, Facebook, and so forth, they all have openings for engineers.
Analysts said recent job gains in the East Bay show that it has finally turned the corner from the employment erosion that occurred during the Great Recession.
"We have been optimistic about the East Bay for a long time," said Jordan Levine, director of research with Beacon Economics. "The East Bay was harder hit during the recession and is taking longer to hit its stride. And long-term, Santa Clara County will do well, because the things that make Silicon Valley and the tech sector strong are still in place."
Jobless rates in the Bay Area worsened during July, despite the overall job gains, according to the Beacon analysis. Unemployment rates and the total jobs figures are derived from two separate surveys and can move in different directions.
The East Bay posted a July unemployment rate of 6 percent, up from 5.7 percent the month before; Santa Clara County was at 5.6 percent, up from 5.3 percent; the San Francisco metro area was at 4.5 percent, up from 4.2 percent. The statewide jobless rate was 7.4 percent in July, unchanged from June. California added 27,700 jobs in July, the EDD reported.
"Statewide job growth is pretty strong now," said Jon Haveman, chief economist with Marin Consulting.
Contact George Avalos at 408-859-5167. Follow him at Twitter.com/georgeavalos.