Today: Employment and housing prices in Silicon Valley officially reached their top marks since the Great Recession began. Also: Adobe not punished on Wall Street for cloud failure.
The Lead: Job market, housing prices continue strong growth
While the rest of California and many parts of the United States continue to trudge through the long, hard slog back from the Great Recession, Silicon Valley has officially made it back to the strength it showed before the subprime housing crisis caused a steep drop in housing prices and drastic rise in unemployment.
California's Economic Development Department released April figures Friday that show Santa Clara County's unemployment rate dipped lower than 6 percent and the San Francisco-San Mateo-Marin county bundle fell lower than 5 percent for the first time since early 2008, as the ravages of the recession first began to send unemployment rates soaring. Earlier this week, Dataquick reported that home prices across much of the Bay Area reached their highest prices since before the recession began in April, with Santa Clara County hitting the highest price on record, which dates back to 1988.
"I don't think it should be a surprise that one of the regions with the nation's strongest economies is the closest to its previous high for home prices," Andrew LePage of Dataquick, a San Diego-based real estate information service, said earlier this week. "San Francisco and Silicon Valley are more than pulling their weight."
The Great Recession officially began in December 2007, when a raft of foreclosures were hitting the housing market and banks were struggling with losses from bonds constructed of housing mortgages. The effects of the recession took a little longer to reach the job market across most industries, with the unemployment rates permanently going above 6 percent in the South Bay and 5 percent in the San Francisco region in June 2008.
California is also regaining much that it lost, but at a slower pace. The statewide unemployment rate dipped lower than 8 percent for the first time since September 2008 in April, thanks to the addition of 56,000 jobs, but Michael Bernick -- a former director of the California EDD and a fellow at the Milken Institute -- said Friday that the growth was not as strong as it may appear.
"It's not the stable, long-term employment," he told the Associated Press. "It's a different type of employment, but it's still counted if you're hired 20 hours a week, if you're hired as a project employee."
The United States unemployment rate also reached its lowest point since September 2008 in April, dropping to 6.3 percent in the best month for job growth in nearly two years, though there were concerns that performance was padded by long-term unemployed workers giving up the hunt for a job.
Even with Silicon Valley's strong growth, there is reason for optimism that the pace will quicken still. The region's technology industry set sales records in 2013, but job growth at the 150 largest technology companies in the Bay Area declined from 2012 to 2013; with the largest cash reserves in the recorded history of the industry, there are hopes of additional hiring this year.
As well, the housing market is constrained by a lack of supply, which kept sales in April well below the average for that month, traditionally the kickoff of the home-buying season. If more homeowners decide to sell amid record prices, even more money will flow across the Bay Area and help the local economy.
"We not only think that this will continue, but we believe growth in the Bay Area will get stronger during the second half of 2014," Jordan Levine, director of economic research with Beacon, told Bay Area News Group reporter George Avalos on Friday. "Corporate profits are high, capacity utilization is moving upward, which means more business investment. That will stimulate economic activity in the Bay Area, particularly in Santa Clara County and San Francisco."
SV150 market report: Adobe gains, Yelp falls after service outages
Wall Street ended the week with an overall gain, with Silicon Valley tech stocks outperforming the rest of the market despite a couple of high-profile tech outages.
Adobe added 2.4 percent to $61.64 despite being forced to apologize for an outage that kept subscribers of its Creative Cloud from accessing the service for more than a day, which the San Jose software maker said could lead to financial reimbursements. The outage was the biggest failure since Adobe went to a cloud model for its signature offerings such as InDesign and Photoshop, putting the software on remote servers accessed through the Internet instead of on a user's hard drive. San Francisco social-reviews website Yelp also suffered a widespread outage, on Friday, and its stock fell 0.9 percent to $54.72.
Google dropped 0.2 percent to $528.30 while securing the acquisition of translation app-maker Quest Visual and hiring a new executive in charge of marketing Google Glass. Apple gained 1.5 percent to $597.51 while facing a lawsuit for texting difficulties, and Tesla Motors gained 1.6 percent to $191.56 after Bloomberg News reported that recent hires had made it the largest automotive employer in the state of California. Twitter dropped 1.6 percent to $32.26 after Wunderlich analyst Blake Harper wrote that the San Francisco company's recent decline put it closer to its "true valuation," and rival Facebook added 0.2 percent to $58.02 after Bloomberg reported that insiders had sold $7.2 billion in stock since the Menlo Park company's IPO almost exactly two years ago. Applied Materials jumped 8.1 percent to $20.21 after analysts praised the chip-equipment company's earnings report; SuperMicro was the only company in the SV150 with a better percentage improvement, gaining 10.1 percent to $19.76 after an upgrade from Stifel Nicolaus.
Up: Applied Materials, SanDisk, Adobe, Intuit, Electronic Arts, Netflix, Tesla, AMD, Workday, Apple, eBay
Down: NetApp, SolarCity, Twitter, Juniper, Yahoo, Yelp, Pandora, Intel
The SV150 index of Silicon Valley's largest tech companies: Up 9.38, or 0.68 percent, to 1,394.32
The tech-heavy Nasdaq composite index: Up 21.29, or 0.52 percent, to 4,090.59
The blue chip Dow Jones industrial average: Up 44.5, or 0.27 percent, to 16,491.31
And the widely watched Standard & Poor's 500 index: Up 7.01, or 0.37 percent, to 1,877.86