In this issue we are rolling out our new expanded analysis of the Northern California economy. Coverage of Northern California will now include two separate publications of quarterly analysis within the region. The first publication will focus on the San Jose-Sunnyvale-Santa Clara metropolitan statistical area and the second on the San Francisco-Oakland-Hayward metropolitan statistical area.
The San Jose metro area labor market and income growth continued to accelerate into 2015. The metro area ranked number one amongst the 50 most populous U.S. metro areas (based on 2010 population estimates) in both job and total income year-over-year growth thus far in 2015. Area nonfarm payrolls increased by 54,700 jobs, or 5.4 percent, from a year ago in August. Demand for workers helped push area total income up to 9.0 percent from a year ago in Q1 of 2015. The recent jobs cycle harkens back to that of the mid-1990s as workers flooded to Silicon Valley to work for tech startups. While income growth is expected to grow by 7.8 percent in 2015, this remains lower than the period between 1995 and 2000 in the run-up to the dotcom bubble burst where annual income growth topped out at 24.8 percent in 2000.
Recent losses in financial markets are potential headwinds for the San Jose metro area economy. The San Jose Mercury News Silicon Valley 150, which tracks the region’s top publically traded tech companies, remains flat from a year ago. After hitting a May 28th closing high of 1808, the index dropped 10.3 percent down to 1621 as of September 21st. This is even with the September 19th closing price in 2014. Iconic Palo Alto-based Hewlett-Packard announced another round of layoffs totaling around 33,000 over the next three years. The company will split into separate entities, HP Inc and Hewlett-Packard Enterprise, later this year.
Click here for the complete San Jose MSA Regional Economic Update: San Jose_2015_Q3.