In a state whose overall economic growth is outpacing the nation’s, San Francisco’s job market is especially impressive.
In the third quarter, nearly a fifth of all jobs added in California were in San Francisco, San Mateo and Marin counties, according to an economic overview released this week by City National Bank.
Those 14,000 new posts are part of a booming labor market that is one of the fastest-growing in the U.S., with 4.2% unemployment and incomes that have risen 30% in the last five years, the report found.
Venture capital funding – much of which is siphoned away by the Bay Area’s tech-centric start-ups – surged 75% in the first three quarters of 2014 compared with the same period a year earlier, hitting post-recession highs.
But the report noted a stark disparity that has lately dulled some of the enthusiasm for the region’s economic prowess – San Francisco and its environs are becoming increasingly unaffordable for workers.
Median home prices in the area are now higher than their pre-recession peak, at a seasonally adjusted $940,000 in San Francisco, compared with $761,000 in Silicon Valley and the rest of the San Jose metropolitan area, according to the report.
Of the 80,000 jobs added to the tri-county San Francisco area in the last two years, half are filled by people who live where they work. The rest commute in from less expensive neighborhoods, said Christopher Thornberg, founding partner of Beacon Economics, which helps City National compile the quarterly report.
Housing and the lofty cost of living are a long-term challenge in California, and the state’s housing market recovery has recently stagnated, according to the report. But home prices are leveling out, and researchers said they expect higher demand to help perk up sales and construction as employment and wages rise.
Consumer spending, a key driver of the California economy, is also stable, according to the report. And although the speed of job gains is slowing in the state as it is nationally, the percentages of long-term unemployed and discouraged workers are falling.
Beacon attributed the statewide economic growth in part to a boost in the previously lagging durable goods manufacturing sector. But California saw broad-based gains in the third quarter, economists said.
The professional and business services industry continues to do well, and for the first time in three quarters, the finance and insurance industry recorded positive output growth, according to the report.