Job Growth & Unemployment, January 28, 2025
Beverly Kerr, Vice President, Research
Insights
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- Austin is the 10th best performing among the top 50 metros, adding 22,700 jobs, or 1.7% growth, in the year ending in December.
- The fastest job growth over the last 12 months occurred in Austin’s construction and natural resources (5.9%) and education and health services (3.3%) industries.
- Three industries, most notably information (-3.1%), have fewer jobs now than one year ago.
- Austin’s seasonally adjusted unemployment rate is 3.3% in December, down from 3.5% in November.
Nonfarm payroll jobs
Jobs in Austin are up by 22,700 or 1.7% over the last 12 months according to Friday’s and today’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 increased by 4,700 or 0.3% from November to December.
Austin’s year-over-year (YOY) increase of 1.7% makes it the 10th best performing among the 50 largest metros. Two other Texas metros, San Antonio (2.0%) and Houston (1.7%), also rank in the top 10 this month. Job growth is 2.1% for the top 10 fastest growing metro areas in aggregate. Fort Worth (1.6%) and Dallas (1.5%) rank 11th and 13th. Five of the 50 largest metros saw negative job growth over the last 12 months.
For the year ending in December, private sector job growth in the Austin MSA is 1.5%, or 17,200 jobs, with gains across 8 of the 11 major private industry sectors. Total job growth was higher, at 1.7%, as the government sector, which accounts for 15% of metro area employment, grew by a robust 2.8%.
Texas saw net private sector job growth of 2.0% with all private industry groups adding jobs over the last 12 months. Total job growth was also 2.0%, due roughly comparable (1.6%) growth in the government sector. For the nation, private sector job growth was 1.3% for the 12 months ending in December with all but two private industries adding jobs. Overall job growth was slightly higher at 1.4%, due to relatively strong 1.8% government sector growth.
Jobs in December are up by 3,200 jobs or 0.2% from November in the not-seasonally-adjusted series for Austin. The seasonally adjusted series also shows positive job growth with a gain of 4,700 jobs or 0.3%. Seasonally adjusted job growth was also positive across the other major Texas metros. Dallas and San Antonio were up by 0.2% and Fort Worth and Houston were up by 0.1%. Statewide, seasonally adjusted jobs are up by 37,500 jobs or 0.3%. Nationally, seasonally adjusted jobs are up 0.2%.
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 (5.9% or 5,100 jobs), while education and health services added the most jobs (5,300 or 3.3%). Financial activities and wholesale trade were also relatively fast growing (3.1% and 3.0% respectively). The three industries with negative YOY growth were information (down 3.1% or 1,600 jobs), manufacturing (0.5% or 400), and professional and business services (0.2% or 500).
While this is another month where we are seeing fewer professional and business services jobs than a year ago, monthly job growth has been on the upswing for four of the last five months. At 286,200, December jobs are higher than all past months except October-December 2023 and February and October 2024. Jobs are currently 6,000 or 2.1% below the industry’s November 2023 peak, but just above (0.1%) the average number of jobs in 2023. Because the industry accounts for more than 21% of Austin’s jobs and has historically been among the metro’s fastest growing, the industry’s recent flat growth has a notable impact on overall job growth.
Statewide, the private industries with the most significant YOY growth are financial activities and wholesale trade, increasing 3.7% and 2.9% respectively. No industries lost jobs over the last 12 months.
Nationally, education and health services (3.8%) and construction and natural resources (2.1%) were the leading private sector growth industries over the last 12 months. Manufacturing lost jobs (0.7%), as did information (0.3%).
Over the last 12 months, the net gain for private service-providing industries in Austin is 12,500 jobs, or 1.3%. Employment in goods-producing industries is up by 4,700 jobs or 2.9%. Statewide, private service-providing industries are up 196,700 or 2.0%, and goods-producing industries are up 46,500 or 2.3%.
Additional graphs: The trend since 2000 for six large industries and six small industries.
Labor force, employment & unemployment
We also now have December 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 February 5. In November, Austin had the 18th lowest rate of unemployment among the 50 largest metros. Data for December show Austin sustains its superior performance relative to the state and the other major Texas metros.
In December, Austin’s not-seasonally-adjusted unemployment rate is 3.1%, above the 3.0% rate seen a year ago. Rates in the other major Texas metros range from 3.4% in Fort Worth and San Antonio to 4.1% in Houston. The Dallas, Fort Worth, Houston, and San Antonio rates are 0.1 to 0.3 percentage points higher than last year. The statewide rate is now 3.7%, up from 3.5% in December of last year. The national unemployment rate is 3.8%, up from 3.5% a year ago.
December unemployment rates are 3.0% in Travis County, 3.1% in Bastrop and Hays Counties, 3.3% in Williamson County, and 3.4% in Caldwell County.
On a seasonally adjusted basis, Austin’s December unemployment rate is 3.3%, down from 3.5% in November. Texas is at 4.2%, unchanged from November. The national rate in December is 4.1%, down from 4.2% in November.
Among Texas’ other major metros, Dallas and San Antonio are at 3.7%, Fort Worth is at 3.8%, and Houston is at 4.2%. 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.)
With Austin’s unemployment rate up from what it was one year ago, the number unemployed has also increased. In December 2023, Austin’s number of unemployed was 43,122. Over the last 12 months, unemployed increased by 3,281 or 7.6%, to 46,403. 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 47,300 persons or 3.2% from one year ago, while persons employed increased by 44,019 or 3.1%.
Additional graphs – Labor force & employment: Texas and United States.
Texas’ labor force growth (500,574 or 3.3%) over the last 12 months exceeds the growth in the number employed (447,445 or 3.1%). Thus, the number of unemployed increased by 53,129 or 10.1%. Nationally, December’s labor force is up by 1,085,000 or 0.7%, while the number employed is above the level of a year ago by 540,000 or 0.3%, and 545,000 more people (9.2%) are unemployed.
Conclusion
Recent months have seen Austin’s and Texas’ job growth slow. Austin’s YOY job growth averaged 5.7% in the first half of 2023, then 3.3% in the second half. That slowing continues in 2024 with YOY growth averaging 2.1% in the first half of the year and 1.6% in the second half. For December, YOY growth is 1.7%—which ranks Austin 10th among the top 50 metros. Austin last placed in the top 10 in March of this year. 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 2024 falls farther, averaging 2.0%.
Austin’s YOY job growth has been lower than the state’s for the last eight months. The last time this was seen was during the early 2000s dot.com recession.
Despite the recent performance relative to the state on payroll job creation, Austin is sustaining an unemployment rate superior to the state and the other major Texas metros.
The Texas Workforce Commission and the U.S. Bureau of Labor Statistics will release January estimates on March 14.
