Q&A: Steve Levy sees bright spots and challenges for Bay Area economy

Veteran economist Stephen Levy has his finger on the pulse of the Bay Area’s dynamic — and often befuddling — economy.

The Bay Area has unleashed numerous boom and bust and boom cycles that have given birth to and killed off countless cutting-edge companies and Levy is keeping track of all that.

This news organization spoke with the director of the Palo Alto-based Center for Continuing Study of the California Economy about the Bay Area’s restless economy.

Q: What is your assessment of the Bay Area economy right now?

A: 2023 is coming in a little better in the Bay Area than I had expected. But it’s still going to be a slow year in the Bay Area. Interest rates are very high and they are a problem.

Q: How do things look farther down the road for the Bay Area?

A: Long-term, I’m very optimistic about the future of the Bay Area economy. Things look particularly good if we can address the region’s housing and transportation challenges.

Q: What are some of the reasons that lead you to believe the Bay Area has a bright outlook?

A: Between the electric vehicle technologies, artificial intelligence and clean energy, the Bay Area is really in pretty good shape to be competitive over the long term.

Q: Is the Bay Area able to withstand these ups and downs fairly well?

A: We have a record of resilience from the 2000 dot-com bust and the 2008 foreclosure crisis. This time, after COVID, we are still adding jobs on a net basis.

Q: What’s your assessment of the California economy overall in the near term?

A: California is in pretty good shape and Southern California is actually doing fairly well.

Q: Could the strikes affecting Hollywood studios create a downturn in Southern California?

A: We do have the actors’ and the writers’ strikes in Southern California. But we also see a track record of strikes getting settled in Southern California. The dock workers’ strike against the shippers was settled fairly quickly. The ports are doing better in California and the airports around the state are improved.

Q: How does the California economy look over a longer-term period?

A: I feel optimistic. The state has to solve its housing and transportation challenges, however.

Q: Some experts predict the economy will slow down to stop inflation yet not slow down so much that we have a recession. Is a soft landing possible for the economy?

A: The U.S. jobs report for July showed that hiring has cooled off and it’s in line with the idea that a soft landing is now possible.

Q: How likely is a soft landing at this point?

A: We haven’t had a soft landing in a while. It would be a one-time, very lucky event if it happens. But the signals are there that it’s possible.

Q: Where are we now with the tech layoffs in the Bay Area?

A: I view the layoffs as a short-term rebalancing of tech workforces. These layoffs are painful for the people who are losing their jobs. But we may be seeing the end of the layoffs.

Q: …read more

Source:: The Mercury News – Entertainment


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