The East Bay Monthly Analysis is prepared by EDAB staff to augment the East Bay Quarterly Forecast authored by economists at the UCLA Anderson Forecast. Monthly and quarterly reports may be viewed at www.edab.org. EDAB encourages you to forward the current report to anyone interested and welcomes your comments and suggestions. For a more printable version of this newsletter, click here. (Click here for a printable copy of Bay Area Regional Economic Indicators). GDP increased at an annual rate of 8.2% in the third quarter of 2003. In the second quarter, real GDP increased 3.1%. The acceleration in real GDP growth in the third quarter primarily reflected an acceleration in personal consumption expenditures (6.9%), a deceleration in imports (-.12), an upturn in exports (0.92%), and accelerations in residential fixed investment (1.05%) and in equipment and software (17.6%) that were partly offset by a downturn in federal national defense spending (-1.3%). On a seasonally adjusted basis, East Bay civilian employment gained 2,020 jobs in November (a .2% increase) and for the second month in a row, the labor force expanded, adding 1,655 workers (a .1% increase). For the first time since the recession began, a drop in the unemployment rate of .1% to 5.9% also matched these signs. 
Unfortunately, San Francisco didn’t follow this pattern - Payroll employment decreased by 6,048 jobs, but the workforce decreased by 6,517 jobs causing the unemployment rate to remain the same at 5.2%. In San Jose, however, payroll employment was up 1,307, and the labor force decreased by 936 workers. With the number of jobs increasing and the workforce decreasing, San Jose’s unemployment rate fell again fell by 0.3%, to 7.3%. The East Bay’s ability to create jobs continues to exceed the rest of the Bay Area, but because it provides more than its share (over one-third) of Bay Area’s workforce, its Payroll Employment is much more adversely affected by its neighbors. | Payroll Employment (Seasonally Adjusted) | | Mar-01 | November-03 | Change | East Bay | 1,068,012 | 1,040,813 | -2.5% | San Francisco | 1,091,166 | 966,206 | -11.5% | San Jose | 1,049,521 | 860,227 | -18.0% | | Unemployment | | Mar-01 | November-03 | Change | East Bay | 3.0% | 5.9% | 2.9% | San Francisco | 2.7% | 5.2% | 2.5% | San Jose | 2.3% | 7.3% | 5.0% | | | | | | |
The East Bay’s lowest Payroll Employment since the high in March 2001 of 1,068,012 was 1,038,244 in December 2001 – showing that 29,768 East Bay residents had lost their jobs. Subsequently, the number of residents with jobs climbed, declined and then rose again in October and November 2003, and 2,869 more residents were employed. In contrast, the number of jobs created in the East Bay (the East Bay’s Civilian Employment) reached a high of 1,223,746 in March 2001 and a low of 1,202,730 in November 2001 – a loss of only 21,206 jobs. Since then, the East Bay has added 33,596 jobs, and most of these after August 2002. But overall, the Bay Areas labor market seems to reflect the national trends – with slow improvement. 
EAST BAY SECTOR EMPLOYMENT, Seasonally AdjustedFour of the ten categories of industry sector employment improved in November, for a net gain of 2,019. 
Manufacturing employment made its first improvement in 10 months in November with an increase of 531 jobs. 
Construction and Leisure and Hospitality continued their short upward trend, which began in October, adding 564 and 260 jobs respectively. Even Wholesale Trade showed a small increase in November, adding 147 jobs. 
 But the remaining sectors all showed continued decline, losing a total of 2,799 jobs. The majority (1,674 jobs) was lost in Local Education. Thus Government (which includes Local Education whose employment peaked in October 2002 at 188,471 jobs) has since lost 8,333 and is expected to continue to be the big loser as State budget cuts and legislative actions negatively impact local governments.  
Seasonally adjusted, September’s sales for Bay Area homes are the highest for a September since 1988. Compared to August’s record sales of 12,488 units, September’s figure was down 4.6% at 11,919. The median price also decreased 0.2% to $446,000. Both declines are typical from August to September. In the East Bay, Alameda county median home prices reached $419,000 in September, up 3.5% over last year, and in Contra Costa the median price reached $399,000, up 13.7%.   In September, the percentage of households in California able to afford a median priced home decreased 4% compared to the same time last year, but increased 1% from the previous month. Although more Californians could afford an average California home last month, 1% fewer could afford one in the East Bay. The median number of days it took for a single-family home in California to sell in September 2003 was 26 days, unchanged from last month and up from 23 days last year. In September there was enough inventory to satisfy 2.1 months of demand, compared to 2.6 months for the same period a year ago. September’s thirty-year fixed mortgage rate averaged 6.15%, down from 6.30% in August, and up from 6.09% in September 2002.  Continuing a trend, most of the East Bay permits for new home construction were issued in the eastern part of the region with 119 new single-family housing permits issued in Brentwood, 75 in the Contra Costa unincorporated area, 66 in Pittsburg, and 45 in Livermore. Concord, Pleasanton, and Hayward all issued over 30 multi-family permits as well. 
In September, Berkeley permitted a sizeable $20.7 million on churches, and Livermore $3.9 million. After a flurry of permits last month, interest in office construction declined this month with only a $1.1 million worth of construction permits in Walnut Creek. Brentwood issued permits for $1.4 million worth of new stores; Contra Cost County, $2.1 million in the unincorporated area, and Fremont $1.5 million. 
Bay Area shelter prices fell in September due to decreases in both rental prices and owner equivalent rent. The CPI data for Items Less Shelter is a bi-monthly statistic that will be released next month. 
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