Job Growth & Unemployment, August 2024
Beverly Kerr, Vice President, Research
Insights
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- Austin is the 28th best performing among the top 50 metros, adding 18,900 jobs, or 1.4% growth, in the year ending in July.
- The fastest job growth over the last 12 months occurred in Austin’s construction and natural resources (4.4%) and government (4.3%) industries.
- Two industries lost jobs over the last 12 months: information (-5.8%) and professional and business services (-1.5%).
- Austin’s seasonally adjusted unemployment rate is 3.4% in July, unchanged from the preceding four months.
Nonfarm payroll jobs
Austin’s year-over-year job growth slowed to 1.4%, or 18,900 jobs, in July 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, Austin jobs decreased by 1,800 or 0.1% from June to July.
Austin’s year-over-year increase of 1.4% makes it the 28th best performing among the 50 largest metros. No Texas metro ranks in the top 10 this month. Houston (2.2%) ranks best, at 14th. Job growth is 2.7% for the top 10 fastest growing metro areas in aggregate. San Antonio (1.6%), Fort Worth (1.4%) and Dallas (1.3%) rank 25th, 29th and 30th respectively. Three of the 50 largest metros saw negative job growth over the last 12 months.
For the year ending in July, private sector job growth in the Austin MSA is 1.0%, or 10,900 jobs, with gains across eight of the 11 major private industry sectors. Total job growth was higher at 1.4% as the government sector, which accounts for 15% of metro area employment, grew by a robust 4.3%.
Texas saw net private sector job growth of 1.8% with all private industry groups adding jobs over the last 12 months. Total job growth was higher, at 2.0%, due to strong (3.1%) growth in the government sector. For the nation, private sector job growth was 1.4% for the 12 months ending in July with all but one private industry adding jobs. Overall job growth was slightly higher at 1.6%, due to relatively robust 2.4% government sector growth.
Jobs in July are down by 12,600 jobs or 0.9% from June in the not-seasonally-adjusted series for Austin. The seasonally adjusted series also shows negative job growth with a loss of 1,800 jobs or 0.1%. Seasonally adjusted job growth was also negative across the other major Texas metros. Fort Worth was down by 0.3%, Houston by 0.2%, San Antonio by 0.1%, and Dallas by 0.03%. Statewide, seasonally adjusted jobs are down by 14,500 jobs or 0.1%. Nationally, seasonally adjusted jobs are up from June by 114,000 or 0.1%.
In Austin, eight of the 11 major private industry sectors added jobs over the last 12 months. Construction and natural resources is the fastest growing (4.4% or 3,700 jobs) and leisure and hospitality added the most jobs (5,200 or 3.5%). Other services was also relatively fast growing (3.2% or 1,700). The two industries with negative year-over-year growth were information (-5.8% or -3,100) and professional and business services (-1.5% or -4,400). Wholesale trade was unchanged.
In July, Austin’s professional and business services employment is at 280,300, which is roughly the level it attained in July 2022. The last peak for the industry was 292,200 jobs in November 2023. Current jobs are 11,900 (4.1%) below that peak. Information, currently 50,100 jobs is 4,600 (8.4%) below its February 2023 peak.
Those two industries combined accounted for 38% of jobs created in Austin between 2013 and 2023, so their slowing or contracting in 2024 accounts for a large part of the recent overall slowing of job growth. A number of the tech companies announcing layoffs over the last year-plus are in these industries. Many of the public layoff announcements lacked detail for local impact, but plainly Austin is seeing its share.
Statewide, the private industries with the most significant growth are construction and natural resources and education and health services, both increasing 3.1%, and other services, which is up 2.7%. No industries lost jobs over the last 12 months.
Nationally, education and health services (3.9%) and construction and natural resources (2.6%) were the leading private sector growth industries over the last 12 months. Information (-0.8%) lost jobs.
Over the last 12 months, the net gain for private service-providing industries in Austin is 7,100 jobs, or 0.7%. Employment in goods-producing industries is up by 3,800 jobs or 2.4%. Statewide, private service-providing industries are up 162,300 or 1.6%, and goods-producing industries are up 51,000 or 2.6%.
Additional graphs: New/lost jobs by industry for June 2024-July 2024 and the trend since 2000 for six large industries and six small industries.
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 28. In June, Austin had the 21st lowest rate of unemployment among the 50 largest metros. Data for July show Austin sustains its superior performance relative to the state and the other major Texas metros.
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In July, Austin’s not-seasonally-adjusted unemployment rate is 3.6%, the same rate seen a year ago. Rates in the other major Texas metros range from 4.0% in San Antonio to 4.8% in Houston. Dallas and Fort Worth are at 4.1%. San Antonio is unchanged from one year ago, while the other major metros are 0.2 to 0.3 percentage points higher than last year. The statewide rate is now 4.4%, up from 4.2% in July of last year. The national unemployment rate is 4.5%, up from 3.8% a year ago.
July unemployment rates are 3.5% in Travis County, 3.6% in Hays County, 3.7% in Williamson County, 3.9% in Bastrop County, and 4.2% in Caldwell County.
On a seasonally adjusted basis, Austin’s July unemployment rate is 3.4%, unchanged from the preceding four months. The statewide rate is 4.1%, up from 4.0% in June. The national rate is 4.3%, up from 4.1% in June.
Among Texas’ other major metros, San Antonio is at 3.7%, Dallas and Fort Worth are at 3.8%, and Houston is at 4.3%. 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.)
While Austin’s unemployment rate is unchanged from one year ago, the number unemployed has increased. In July 2023, Austin’s number of unemployed was 51,953. Over the last 12 months, the unemployed increased by 1,569 or 3.0%, to 53,522. This is due to a smaller increase in the number employed, compared to the labor force. The Austin metro’s civilian labor force (employed plus unemployed) increased by 26,325 persons or 1.8% from one year ago, while persons employed increased by 24,756 or 1.8%.
Additional graphs – Labor force & employment: Texas and United States
Texas’ labor force growth (329,223 or 2.2%) over the last 12 months exceeds the growth in the number employed (290,055 or 2.0%). Thus, the number of unemployed increased by 39,168 or 6.1%. Nationally, July’s labor force is up by 1.4 million or 0.8%, while the number employed is above the level of a year ago by 56,000 or 0.0%, and 1.3 million more people (20.6%) are unemployed.
Conclusion
Recent months have seen Austin’s and Texas’ job growth slow. Austin’s year-over-year (YOY) job growth averaged 5.7% in the first half of 2023, then 3.3% in the second half. That slowing continues in the first seven months of 2024 with YOY growth averaging 2.0%. For July, YOY growth is 1.4%—which ranks Austin 28th and in the middle of the pack among the top 50 metros. Between the Great Recession and the pandemic, Austin’s annual average growth ranged from 3.4% to 4.7% and averaged 4.0%.
For Texas, growth averaged 4.1% in the first six months of 2023, followed by an average of 2.6% for the last six months of the year. As in Austin, average YOY job growth in the first half of 2024 falls farther, averaging 2.1%. Texas’ YOY growth for July is 2.0%.
Austin’s YOY job growth has been lower than the state’s for three months. The last time this was seen was during the early 2000s dot.com recession. Looking at month-to-month percent change in the seasonally adjusted series, Austin outperformed the state in only one month of 2024.
Despite the recent performance on payroll job creation, Austin is sustaining an unemployment rate superior to the state and the other major Texas metros.
With each third-Friday release of labor market data, the Dallas Fed revises their Texas Employment Forecast for 2024. In June, the forecast was relatively strong, estimating that statewide jobs would increase 2.4% in 2024. In July, the forecast for 2024 was revised down to 1.9%. This month brings another curtailment of the forecast, which now estimates Texas jobs will increase 1.6% in 2024. In addition to job growth through July, the forecast is based on projected national GDP, oil futures prices, and the Texas and U.S. leading indexes. While Hurricane Beryl impacted Texas employment in July, Luis Torres, Dallas Fed senior business economist, noted that “job losses in sectors not affected by the hurricane, such as professional and business services and health and education jobs, point to a cooling in the job market.”
The Texas Workforce Commission and the U.S. Bureau of Labor Statistics will release August estimates on September 20.
