SV Jobs Report: Unemployment jumps to three-year high; job growth slows, but remains positive

Not too much good news in today's employment report from the state -- but it could be worse.

The unemployment rate for the San Jose metro region rose to 5.5% last month, reaching its highest level since July 2005.

On the bright side, employment growth remained small but positive. Unlike many regions of the state, Silicon Valley has not begun to lose jobs.

As the rising unemployment rate indicates, however, we are not adding enough new jobs to keep up with demand for work. In part, Silicon Valley may not be losing jobs because we've already lost them: the San Jose metro area remains far off of its peak employment, with 150,900 fewer jobs in the region now than in March 2001.(Continued...)

The chart at right shows which industries have gained or lost jobs over the most recent economy cycle. The only sector that has seen any substantial growth is Educational and Health Services, with 15,900 net new jobs. Most major sectors have declined, with the biggest job losses over the cycle in Manufacturing (-87,600 jobs) and Professional and Business Services (-53,200 jobs). Both of the latter sectors began to grow modestly in the past year or two, but they remain far from regaining the jobs lost.

Highlights of the local jobs report:

• Compared to the previous month, the San Jose metro area added a net 4,900 non-farm jobs in March. The largest gains for March were in leisure and hospitality, with 1,700 new jobs, and professional and business services, with 1,200 jobs. The retail sector lost jobs for the third consecutive month, shedding 400 positions.


• Over the year, the San Jose metro area added 7,200 jobs, a 0.8% increase from March 2007.


• The biggest year-over-year gains were in manufacturing (+3,400 jobs), private educational and health services (+2,000 jobs), information (+1,600 jobs), and trade, transportation & utilities, which includes retail (+1,100 jobs).


• The construction and financial activities sectors -- both strongly tied to the housing market -- continued to weaken, with construction losing 1,200 jobs over the year and financial activities losing 1,300 jobs. The region also lost 500 jobs over the year in leisure and hospitality.


• For March 2008, the unemployment rate stood at 5.5%, up 0.3 percentage points from February and up 1.0 points over the year. That translates to 9,100 more unemployed residents (by official measures) than in March 2007.


• Seven years after the tech crash, Silicon Valley holds 150,900 fewer jobs than it did in March 2001.