The Bay Area job market is so robust that this region has reached what is considered “full employment,” and California should reach that mark sometime in the second half of 2016, according to an economist with the UCLA Anderson Forecast, which released a new quarterly report Monday.

Shrinking jobless rates and steadily expanding employment gains, along with a surging economy, are primarily what is boosting the employment picture for the nine-county Bay Area, said Jerry Nickelsburg, senior economist with the UCLA Anderson Forecast.

Full employment isn’t always precisely defined, but the Federal Reserve, the nation’s central bank, has been using a 5 percent nationwide jobless rate as the target level that defines full employment for the United States, Nickelsburg said. Santa Clara County’s unemployment rate is around 4 percent, San Mateo County is at 3.3 percent, and San Francisco is at 3.6 percent, Nickelsburg said. The unemployment rate in the East Bay is at 4.8 percent.

Each of the Bay Area’s metro regions have recovered all the jobs they lost in the Great Recession, and some even have set all-time records for employment or are near those peaks.

“The job market in the Bay Area is outstanding,” said Scott Anderson, chief economist with San Francisco-based Bank of the West. “The Bay Area employment market is growing much faster than the nation or the state. It’s attracting people to the region.”

The tech boom is helping to drive the economy in the Bay Area.

“The main driver is the growth of the technology sector in Silicon Valley,” Anderson said. “But this rebound is broader than tech. Health care, leisure and hospitality, retail, construction and even manufacturing are growing.”

In August, California posted a 6.1 percent unemployment rate, slightly better than the July statewide rate of 6.2 percent.

Despite the improving picture, the pace of job growth is expected to slow in California in the next two years, according to the Anderson Forecast.

California employment will increase 2.7 percent in 2015, but slow to 2.2 percent in 2016 and to 1.4 percent in 2017, the forecast stated.

The state’s unemployment rate, now at 6.1 percent, will fall to about 4.8 percent over the next two years, according to the forecast. That would be a similar level to the U.S. jobless rate.

With hiring brisk and the jobless rate improving, analysts believe employers will be forced to dangle pay raises in front of potential recruits as well as workers they seek to retain.

“You tend to have wage pressure when there is full employment,” Nickelsburg said.

Economists point out, however, that full employment also poses significant challenges.

“Full employment means you have to build more housing,” said Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy.

“When you reach full employment, and companies are still expanding and hiring people in the Bay Area, you need housing that is near job sites,” Levy said. “People will move into the area for the jobs that are here.”

Full employment is also on the horizon for the nation, John Williams, president of the Federal Reserve Bank of San Francisco, said in remarks prepared for a speech to a UCLA Anderson Forecast conference Monday.

“We’re on pace to add 2.5 million jobs this year” in the United States, Williams told the conference.”Given the progress we’re seeing, we should reach or exceed full employment on a broad set of measures buy the end of this year or early next year. I expect the U.S. unemployment rate to fall below 5 percent later this year and remain there through 2016.”

Williams, a voting member of the Federal Reserve’s Open Market Committee, also said an increase in short-term interest rates remains a possibility in 2015 because job creation continues and the inflation rate is rising.

“Given the progress we’ve made and continue to make on our goals, I view the next appropriate step as gradually raising interest rates, most likely starting sometime this year,” Williams said in his speech.

Contact George Avalos at 408-859-5167. Follow him at Twitter.com/georgeavalos.