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Bay Area Research Rant: It’s All About Jobs, Silly

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By Robert Sammons, Regional Director – Northwest U.S. Research

The U.S. job numbers were released last Friday and it was generally good news. There were 211,000 positions created in November with the average for the 11 months of 2015 now at 210,000 with the monthly average for 2014 at 260,000. Of course, the news could always be better – underemployment and those working part-time that prefer working full-time are still too high and wages could certainly use a bigger boost. The most recent numbers, though, will give the Fed the ammunition it needs to begin raising rates this month – slowly, oh so slowly, at first. Our in-house economists continually track this data so look for more reports forthcoming!

This most recent national release had me taking a closer look at the Northern California employment numbers. (Okay – true confessions – I’m a real geek when it comes to anything focused on the economy so I jump all over this data as soon as I possibly can). Now the metro level figures are released behind national figures by about three weeks or so, thus I’m going back to October on this rundown.

Certainly NorCal has been a major contributor to the national job growth – and it’s not just San Francisco and the Silicon Valley either. The news has been positive recently in all metro areas across the region according the California Employment Development Department. On the downside, this boom in jobs has contributed to a significant rise in the cost of living – particularly housing costs. The region just has not kept up with demand for years and is playing catch-up at this point. This, along with an overburdened mass transit system, is beginning to hamper the growth patterns. Thus far, it hasn’t been severe and we continue to add bodies across NorCal. But if we don’t deal with the housing and infrastructure issues, that growth won’t last forever.

So here we go – over the past year – a look at who has added how many jobs in the region!

On a percentage basis, Marin County takes the top award with the biggest jump in job growth at 5.6% followed by the more likely suspects of Santa Clara/San Benito and San Francisco/San Mateo. Overall, there were 172,400 jobs added across the region over the past twelve months, a jump of 3.4%.

Oct-15

Oct-14

Total Employment

Total Employment

Y-O-Y Change % Change
Marin

118,900

112,600

6,300

5.6%

Santa Clara/San Benito

1,080,200

1,026,700

53,500

5.2%

San Francisco/San Mateo

1,077,500

1,030,500

47,000

4.6%

Solano

136,900

132,200

4,700

3.6%

Sonoma

207,800

201,300

6,500

3.2%

Monterey

199,600

195,000

4,600

2.4%

El Dorado/Placer/Sacramento/Yolo

929,600

908,600

21,000

2.3%

Napa

79,200

77,500

1,700

2.2%

San Joaquin

235,200

230,400

4,800

2.1%

Alameda/Contra Costa

1,099,500

1,078,600

20,900

1.9%

Santa Cruz

108,800

107,400

1,400

1.3%

NorCal Total

5,273,200

5,100,800

172,400

3.4%

 

 

 

 

 

If office jobs only are sorted within the region, the story is similar. That said, the “winner” is still somewhat of an outlier – Monterey County – with an office job increase of 9.5%. That market is followed by Santa Clara/San Benito and San Francisco/San Mateo. Overall office sector job growth over the past twelve months was 5.5%, actually a bit heftier than when looking across all sectors.

Oct-15

Oct-14

Office Employment Office Employment Y-O-Y Change % Change
Monterey

19,600

17,900

1,700

9.5%

Santa Clara/San Benito

342,400

313,400

29,000

9.3%

San Francisco/San Mateo

405,200

379,400

25,800

6.8%

Marin

29,400

27,600

1,800

6.5%

Sonoma

32,400

31,100

1,300

4.2%

San Joaquin

29,100

28,100

1,000

3.6%

Santa Cruz

14,100

13,700

400

2.9%

Solano

16,100

15,700

400

2.5%

Alameda/Contra Costa

258,400

252,600

5,800

2.3%

El Dorado/Placer/Sacramento/Yolo

186,600

183,500

3,100

1.7%

Napa

9,900

9,800

100

1.0%

NorCal Total

1,343,200

1,272,800

70,400

5.5%

One particular comparison regarding the Santa Clara/San Benito and San Francisco/San Mateo markets versus the largest city in the U.S. – New York City (being in NYC for so many years it’s just bound to happen from time to time that I make these comparisons – so sorry!). NYC has almost an identical number of office jobs as this entire region – 1,343,200 for NorCal and 1,342,800 for NYC proper. That said, NYC has gained 28,600 office jobs over the past twelve months while both Santa Clara/San Benito and San Francisco/San Mateo, both much smaller markets as a whole, have gained approximately the same number of jobs each! Let me be a bit clearer – NYC gained 28,600 office jobs over the past year – Santa Clara/San Benito gained 29,000 office jobs – San Francisco/San Mateo gained 25,800 office jobs. That really speaks to the crazy boom period we are in right now.

Is all this growth in the region sustainable? Honestly – probably not. The current C&W forecast is calling for solid job growth in 2016 and then some slowing (though still positive) in 2017 – that’s due to an expected overall U.S. trend as well as the aforementioned cost of living issues for this region. The figures will obviously bear monitoring closely going forward.

This post is commentary from the latest weekly edition of our Bay Area Research Rant, which you can subscribe to for free by e-mailing robert.sammons@cushwake.com.

Robert_SammonsRobert Sammons is a Research Director for Cushman & Wakefield. Based in San Francisco, Robert’s principal roles include working closely with the C&W research teams across the Northwest – including Northern California, Portland and Denver. Robert is author of numerous documents that delve into a wide variety of real estate and economic trends. He has been a quoted source for all manner of real estate and related economic information in many widely known media outlets across the country. Robert has 29 years of real estate experience as both an appraiser and researcher. He earned a BBA in Real Estate from The University of Georgia and an MS in Real Estate from Georgia State University. Robert is a member of the Urban Land Institute.

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