Bay Watch – January 2024 Jobs Report and Benchmark Revision

Bay Watch: A Weekly Look into the Bay Area Economy

March 11, 2024

Due to major data revisions last week, the Bay Area’s total job count is nearly 100,000 lower than previously reported

Due to major revisions released by the Bureau of Labor Statistics last Friday, employment figures in the 9-county Bay Area are significantly lower than previously disclosed. Every year, the state’s Employment Development Department (EDD) conducts a “Benchmark,” an annual process in which employment estimates are revised. Each month we release a Bay Watch report on the labor market with the latest job numbers from the BLS and EDD. These are estimates based on a sampling of employers. However, every March, data are updated based on unemployment insurance (UI) tax reports that nearly all employers are required to file with state employment security agencies.

This March, revisions showed staggering changes to labor market trends: total payroll employment in the region is nearly 95,000 lower than previously reported, for a total of 4,073,900 jobs in January 2024. Previous estimates showed the Bay Area fully recouping pre-pandemic employment mid-2023, while new estimates show that the region never fully recovered, and is still down 1.1% (or 46,100 jobs).

While the new data includes revisions to pre-pandemic jobs, the biggest revisions occurred for 2023: the EDD originally estimated that 62,100 jobs were added to the Bay Area last year, when we actually added only 4,600 jobs, losing 27,600 jobs in the first three quarters of the year. However, these losses were followed by major gains in the final quarter and into 2024. Preliminary data released for January 2024 show the biggest month of job gains since early 2022.

Which industries are leading the region’s recovery?

The education & health sector, which includes most teachers, nurses, and other medical/care professionals saw the biggest increase in employment last year. This sector has also seen the biggest increase since before the pandemic. Despite taking the biggest hit since the start of the pandemic, the leisure and hospitality industry (restaurants, bars, hotels, arts, sports) added 16,700 jobs last year, however, still remains 36,300 jobs below pre-pandemic levels.

The biggest shift due to the revision is that losses in tech and office jobs appear to be larger than previously thought. The Information sector (which houses most of the tech sector) lost 23,100 jobs last year, for a net loss of 9,000 since February 2020. Previously, Information was thought to have lost only 300 jobs last year, for a net gain of 14,800 jobs. These figures previously defied many of the tech layoffs and bank failures that had characterized the first quarter of 2023, but now seem to more realistically match what was seen on the ground.