The San Francisco metro area continues to showcase its economic strengths and challenges as 2024 comes to a close. According to the latest U.S. Bureau of Labor Statistics (BLS) data, the region reported modest job growth, but high housing costs and a struggling tech sector remain significant concerns. Here's a closer look at what the numbers reveal.

Employment Trends

Employment in the San Francisco metro area rose slightly by 0.4% from October 2023 to October 2024, adding 9,700 nonfarm jobs. Key growth sectors included education and health services, which gained 14,200 jobs (+3.5%), and leisure and hospitality, which added 3,300 jobs (+3.8%).

However, not all industries thrived:

• The information sector, a cornerstone of the region’s economy, shed 9,300 jobs (-6.6%).
• Construction and manufacturing also faced declines, losing 3,300 and 4,100 jobs, respectively.

Unemployment Rates

The unemployment rate in San Francisco County stabilized at 3.7%, aligning closely with the state and national averages.

Surrounding counties, including Alameda and Contra Costa, reported similarly steady rates.

Wages and Affordability

San Francisco workers continue to earn significantly above the national average, with weekly wages reaching $2,879 compared to $1,527 nationwide. However, the region’s notoriously high cost of living offsets this advantage. Total annual expenditures for residents averaged $110,886 (2022–2023), driven by housing, which accounts for nearly half of spending—45.9%, far above the national average of 29.1%.

Cost of Living and Inflation

Consumer prices in the San Francisco area rose 2.6% year-over-year in October 2024, slightly below the U.S. average of 2.8%. Food and energy costs dropped by -1.9% and -4.9%, respectively, offering some relief to consumers. Despite this, housing remains a critical burden, contributing to affordability challenges that many residents face.

Industry Insights

The producer price index highlights sustained growth in industries such as freight trucking (+4.9%) and healthcare (+5.4%). However, job losses in the tech sector raise questions about the future of San Francisco's economy, as the once-dominant industry faces headwinds.

Conclusion

The San Francisco economy remains a tale of two stories: robust growth in health and leisure sectors juxtaposed with challenges in technology and affordability. Policymakers and businesses must address the region's affordability crisis while fostering innovation to sustain its economic vitality.