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Job growth & unemployment, August 2023

Posted on 08/22/2023 by Beverly Kerr

Insights

Nonfarm payroll jobs

Austin’s July nonfarm payroll jobs total is up by 39,500, or 3.1%, over the last 12 months according to Friday’s releases of monthly labor market data by the Texas Workforce Commission and the U.S. Bureau of Labor Statistics. On a seasonally adjusted basis, June to July job growth was 0.2% in Austin. Growth in Texas and the U.S. was also positive, at 0.2% and 0.1%, respectively.

Combining job losses for March and April 2020, Austin lost 137,200 jobs, or 12.0%, due to the impact of COVID-19. By April 2021, Austin surpassed the jobs total it had in the last pre-pandemic month.[1] Since March 2022, Austin has been at or above the level of employment that might have been projected had there been no pandemic. In 2018 and 2019, the average monthly percent change in nonfarm payroll jobs was 0.33%. The graph below illustrates what Austin’s job trend might have looked like if the pandemic hadn’t happened and Austin sustained that average pre-pandemic growth rate.

As of July 2023, 48 of the top 50 metropolitan areas have regained their pre-pandemic level of jobs. Comparing metros based on where they stand relative to pre-pandemic February 2020, Austin, up 15.4%, is the best performing major metro. Dallas (12.2%) and Fort Worth (9.6%) are also in the top 10. San Antonio (6.9%) and Houston (4.9%) rank 12th and 19th. Detroit ranks 50th with July 2023 jobs 0.3% below February 2020.

Austin’s year-over-year increase of 3.1%, or 39,500 jobs, makes it the 14th best performing among the 50 largest metro areas. Faster growing Dallas (4.4%) and Fort Worth (4.3%) rank second and third. Houston (3.0%) and San Antonio (2.7%) rank 16th and 25th.

Austin’s extraordinary post-pandemic growth rates during 2021 and 2022 were bound to subside into a more normal range. From 1990 to 2022, annual job growth averaged 3.8%, and over the expansion years between the Great Recession and the pandemic, growth averaged 4.0%. July’s year-over-year gain of only 3.1% is below trend, but a preliminary estimate of one month may not be a decisive signal. For another perspective on Austin’s and Texas’ performance through July, see the Federal Reserve Bank of Dallas’ August Texas Economic Performance and Outlook, “Employment Growth Speeds Up as Economy Remains Resilient,” also released on Friday.[2]

For the year ending in July, private sector job growth in the Austin MSA is 3.3%, or 36,900 jobs, with gains across nine of the 11 major private industry sectors. Austin’s sizable government sector (15% of jobs) is up by a moderate 1.4% (2,600 jobs), thus bringing the overall year-over-year job growth rate down to 3.1%.

Texas saw net private sector job growth of 3.5% with each of the private industry sectors adding jobs over the last 12 months. Total job growth was 3.3% as the government sector, which accounts for 15% of total state employment, grew by a more moderate 2.6%. For the nation, private sector job growth was 2.1% for the 12 months ending in July with all but one private industry adding jobs. Overall job growth was also 2.1%, with the government sector growing 2.4%.

Jobs in July are down by 7,900 jobs or 0.6% from June in the not-seasonally-adjusted series for Austin. However, in the seasonally adjusted series, jobs are up by 2,600 or 0.2%. Seasonally adjusted jobs are up by 0.4% in Dallas, 0.3% in Fort Worth, and 0.1% in Houston, but down 0.3% in San Antonio. Statewide, seasonally adjusted jobs are up 26,300 or 0.2%. Nationally, seasonally adjusted jobs are up from June by 187,000 or 0.1%.

In Austin, nine of the 11 major private industry sectors added jobs over the last 12 months, most notably leisure and hospitality (7.0% or 9,800 jobs), construction and natural resources (4.8% or 3,900 jobs), and other services (4.4 or 2,200 jobs). Professional and business services added the most jobs, 10,100 (or 3.6%). Information (-500 or -0.9%) and wholesale trade (-100 or -0.2%) saw negative year-over-year growth.

Each major private industry sector in Austin has now surpassed pre-pandemic employment levels and, in aggregate, private industry is up 19.6%. Leisure and hospitality shed 62,100 jobs in March and April of 2020 (45% of all jobs lost). The industry finally regained those lost jobs in April 2022. Employment attained a new peak of 151,300 jobs in April 2023, but is slightly down from that in July. The industry’s July jobs total of 150,600 represents 11.4% of all jobs which is slightly below its 12.0% pre-pandemic share. Other services (51,700 jobs in July) regained its pre-pandemic level of employment in June 2022,[3] one month after leisure and hospitality. Transportation, warehousing and utilities is the lone industry in Austin that did not lose jobs with the onset of the pandemic and it has seen the fastest growth, 39.6%, since February 2020. The large professional and business services industry accounts for 40% of all private sector jobs added in Austin since February 2020.

Additional graphs: New/lost jobs by industry for Feb. 2020-July 2023 and June 2023-July 2023 and the trend since 2000 for six large industries and six small industries.

Statewide, over the last 12 months, all private industries added jobs. The two industries with the most significant growth are education and health services (5.6%) and wholesale trade (4.9%). All private industries have more jobs now than they did in February 2020. Private industry jobs are up 9.6%. The best performing industry since the pandemic is transportation, warehousing and utilities, which is up by 17.8% from February 2020. Construction and natural resources, the last industry to recover, now has 2.5% more jobs than it did pre-pandemic.

Nationally, all private industries added jobs over the 12 months ending in July, led by education and health services (4.1%) and leisure and hospitality (3.9%). Each industry has now regained pre-pandemic levels of employment and in total, private sector jobs are up 5.2%. Leisure and hospitality finally recovered the jobs lost during the pandemic in April 2023 and now has over one million more jobs (6.6%) than the industry did in February 2020. Other services, the last industry to recover, is now up by 1.4%.

Over the last 12 months, the net gain for private service-providing industries in Austin is 30,400 jobs, or 3.2%. Employment in goods-producing industries is up by 6,500 jobs or 4.3%. Statewide, private service-providing industries are up 318,400 or 3.3%, and goods-producing industries are up 80,300 or 4.2%.

Labor force, employment & unemployment

We also now have July labor force, employment, and unemployment numbers for Texas and local areas in Texas. The same data for all U.S. metros will not be released by the U.S. Bureau of Labor Statistics until August 30. In June, Austin had the 28th lowest rate of unemployment among the 50 largest metros. Unemployment numbers for July show Austin’s performance relative to the state and other major Texas metros being sustained.

In July, Austin’s not-seasonally-adjusted unemployment rate is 3.8%, which is an increase of 0.8 percentage points above where it was one year ago (3.0%). Rates in the other major Texas metros range from 4.1% in Fort Worth to 4.8% in Houston and their current rates are 0.4 to 0.6 percentage points above the rates one year ago. The statewide rate is now 4.5%, up from 4.0% in July of last year. The national unemployment rate is 3.8%, unchanged from a year ago.

Before the pandemic in 2019, the unemployment rate averaged 2.7% in Austin, 3.5% in Texas, and 3.7% nationally.

July unemployment rates are 3.8% in Travis and Hays Counties, 3.9% in Williamson County, 4.1% in Bastrop County, and 4.3% in Caldwell County.

On a seasonally adjusted basis, Austin’s July unemployment rate is 3.8%, up from 3.4% in June. The statewide rate is 4.1%, unchanged from June. The national rate is 3.5%, down from 3.6% in June.

Among Texas’ other major metros, Dallas and Fort Worth are at 4.2%, San Antonio is at 4.4%, while Houston is at 4.8%. Seasonally adjusted unemployment rates for Texas metros are produced by the Federal Reserve Bank of Dallas. (The Texas Workforce Commission also produces seasonally adjusted rates for Texas metros, but publication lags the Dallas Fed’s estimates.)

In February 2020, before pandemic impacts, the number unemployed in Austin was 32,881. The number climbed to 133,963 in April and also exceeded 100,000 in June and July. In July 2023, unemployed stands at 55,387. That is 33.1% higher than it was one year ago and it is 41.0% above what the number of unemployed might be if the unemployment rate matched Austin’s pre-pandemic 2.7% average.

The Austin metro’s civilian labor force (employed plus unemployed) fell by 91,603 persons or 7.2% in March and April of 2020, while persons employed decreased by 192,685 or 15.6%. Labor force now stands at 14.9% above what it was in February 2020 and employed is estimated at 13.5% above.

Additional graphs – Labor force & employment: Texas and United States

Texas’ labor force is 7.2% above pre-pandemic February 2020, while employment is 6.0% above. Nationally, civilian labor force and employment surpassed February 2020 for the first time in March 2022. In July 2023, the national labor force is 2.5% above February 2020 and employment is also up by 2.5%.

Over the last 12 months, Austin’s labor force increased by 3.8% and employed by 2.9%. Texas increased labor force by 3.4% and employed by 2.9%. Nationally, the labor force growth was 1.8% and employment increased by 1.8%.

The Texas Workforce Commission and the U.S. Bureau of Labor Statistics will release August estimates on September 15.

Opportunity Austin’s Economic Indicators page provides up-to-date historical spreadsheet versions of Austin, Texas and U.S. data for both the Current Employment Statistics (CES) and Local Area Unemployment Statistics (LAUS) data addressed above. The Central Texas Economy in Perspective page provides an archive of past articles on the labor market and many other topics.

Footnotes:

  1. Fort Worth and Nashville also made up pandemic-related job losses by April 2021.↩
  2. The Dallas Fed makes accelerated benchmark revisions to the BLS/TWC estimates to produce their own (seasonally adjusted) jobs series for the state and the major metros. They also produce year-to-date and other estimates somewhat differently. Their July 2023 seasonally adjusted, annualized rate job growth estimate for Texas is 3.3% versus 3.6% for Austin.↩
  3. Other services is largely comprised of repair and maintenance; personal and laundry services; and religious, grantmaking, civic, professional, and similar organizations.↩

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