By George Avalos,
The South Bay led the nation in job growth over the past year, according to a new government report -- and economists predict the region's surge will power a Bay Area expansion.
During the 12 months that ended in October, the South Bay job market grew by 3.2 percent, the U.S. Bureau of Labor Statistics reported Wednesday. Meanwhile, the East Bay employment sector expanded by 0.1 percent.
The pace of job growth in the South Bay was nearly triple the nationwide rate and almost double the growth rate for California.
And improvement in the Bay Area job market is likely to continue, according to a new UCLA Anderson Forecast released Wednesday.
"The Bay Area will be the fastest-growing economy in California in the coming few years, based on employment and income growth," said Jerry Nickelsburg, a senior economist with the Anderson Forecast.
This time around, the growth has a better foundation than during the dot-com bubble, whose spectacular flameouts included Pets.com, Boo.com and Startups.com. Companies such as Apple (AAPL), Google (GOOG), Facebook, LinkedIn and Zynga have real sales and real product plans, notes Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy.
"This rebound is for real in the Bay Area," Levy said. "The wave of tech hiring is continuing. There are job openings all over the place in the South Bay."
That should produce a ripple effect for the nine-county region, said Jeffrey Michael, director of the Stockton-based Business Forecasting Center at University of the Pacific
"The South Bay has been at the front of the recovery and over time we expect the rest of the Bay Area to join Silicon Valley," Michael said.
Although the South Bay was the national leader among major metro centers over the past year, it was closely followed by energy nexus Houston, which powered to a 3.1 percent jobs gain; and by tech and trade hub Seattle, up 2.3 percent. The weakest large urban center was Atlanta, with a job base that eroded by 1 percent.
Employment growth across California, which gained 39,200 payroll jobs in September and 25,700 in October, has encouraged economists, who see those two months as springboards to propel further expansion.
"Although other indicators did not predict stronger growth in payroll employment, there it was" in September, Nickelsburg said. "October job growth has followed course, yielding the first signs of a nascent new recovery."
Yet analysts warn the brisk pace could slow. They foresee a pathway to full recovery that's dotted with potholes.
"The current forecast is for the surge in employment to abate and slow growth to persist on average through 2012," Nickelsburg said.
Double-digit unemployment will haunt California in 2012 and will still average 10.5 percent during 2013, according to the Anderson Forecast. Some economists think 10 percent unemployment will continue beyond 2013.
"California will have double-digit unemployment well into 2014, possibly all the way through 2014," Michael said.
While the tech surge is a welcome counterpoint to dreary sectors of the Bay Area economy, tech's weak cousins will have to become stronger for the overall economy to significantly improve. And many economists don't see that happening soon.
"The Bay Area is growing, but the job market is not on fire," said Jon Haveman, chief economist with the Bay Area Council's Economic Institute. "It will grow more quickly than the rest of the nation, but the pace will be much slower than what we would like."