The Bay Area job market should expand more quickly than California and the nation over the next two years, primarily because of solid employment growth in the San Jose and San Francisco area, although the Oakland area should expand as well, a report released Thursday shows.
Over the two years that include 2013 and 2014, job totals in the Bay Area should expand by 7.2 percent, the Bay Area Council's Economic Institute reported. That would mean average growth in the 3.5 percent range for each of the two years.
"The Bay Area economy has been outpacing California and the United States by a wide margin," said Jon Haveman, chief economist with the Economic Institute. "That is likely to continue."
Technology employment will drive much of the Bay Area's job growth, according to the group's report.
Professional and business services, which consist of a number of tech job sectors, will grow most quickly, expanding by 15.5 percent over the two years, the forecast showed.
Education and health care will expand by 10 percent. Leisure and hospitality will expand by about 9 percent. Durable goods manufacturing will grow by 8.5 percent, the report determined.
The only job losses expected in the Bay Area over the two years will come from local, state and federal government agencies, which will reduce employment.
A major red flag for the Bay Area economy is a so-called "fiscal cliff" that would materialize were the divided federal government -- consisting of a Democrat-controlled White House, a Democrat-led U.S. Senate and a Republican-led House of Representatives -- were unable to fashion a deal to address the government's spending, revenue and debt woes.
A failure to craft a spending, budget and revenue plan would trigger spending reductions and tax increases, which could lead to job cuts nationwide.
"If we do go off the fiscal cliff, that means it's pretty clear we will to back into recession nationwide," Haveman said. "The Bay Area is reliant on what is going on in the country for its own growth. That would mean flat employment or job losses here."
One of the economists who appeared at the Bay Area Council's forecast conjured up a forbidding portent of a second recession akin to two recessions that engulfed the nation during the Great Depression of the 1930s. The Great Depression consisted of two devastating recessions -- one from roughly 1930 through 1933 and a second slump during 1937 and 1938, with a few years of rapid growth in between.
The U.S. could tumble into a double-dip recession scenario if a "fiscal cliff" scenario materializes, fueled by budget cuts and tax increases that occur simultaneously, the economists warned Thursday.
"Fiscal policy threatens a return of 1937," Jerry Nickelsburg, a senior economist with the UCLA Anderson Forecast, stated in a presentation delivered to the gathering on Thursday in San Francisco.
Contact George Avalos at 925-977-8477. Follow him at twitter.com/george_avalos.