Welcome to the Regional Outook East Bay, Beacon Economics' quarterly forecast for the East Bay Metropolitan Statistical Area.  This report delivers a clear snapshot of the current state and future outlook of employment, home prices, consumer spending, personal income, and othe leading indicators in this key region of California.

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Labor Market Struggle Continues In The East Bay

The East Bay’s job recovery remains slow. After seeing modest gains in total nonfarm employment earlier in the year, the region has unfortunately returned to a pattern of shedding jobs over the past two months. The 947,000 jobs the East Bay had in October is higher than the all-time low that was hit this past March, but still represents a loss of nearly 5,000 jobs over the last two months alone.

Still, not all the news is bad news. On an industry level, the Wholesale Trade sector has added nearly 2,000 jobs since the beginning of the year. Though the numbers have been somewhat erratic over the past few months, the industry has experienced a general trend of job growth throughout 2011 – something that has recently been aided by increased international trade activity. Also, the Professional, Scientific, and Technical Services sector has added 3,000 jobs since January.

Overall, while job growth has not yet begun to pick up in the East Bay, Beacon Economics is forecasting that trend to change going forward. By the beginning of 2014, total nonfarm employment is expected to have added 50,000 jobs, while the unemployment rate is expected to drop by 2%.

Consumers Coming Out Of Hibernation

Taxable sales in the East Bay have been on the rise since hitting their lowest point in mid-2009. The “Great Recession” caused households across the East Bay, and the nation, to curb their spending and begin to save again. Although they have not reached pre-recession levels, taxable sales in the East Bay grew by 16% from the second quarter of 2009 to the third quarter of 2011.

With higher income levels and less debt on their books, consumers in the East Bay will continue to drive this trend upward into the future. Beacon Economics is forecasting that by 2013, taxable sales in the East Bay will have returned to their pre-recession levels.