Job Growth & Unemployment, NOVEMber 19, 2024
Beverly Kerr, Vice President, Research
Insights
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- Austin is the 14th best performing among the top 50 metros, adding 22,500 jobs, or 1.7% growth, in the year ending in October.
- The fastest job growth over the last 12 months occurred in Austin’s construction and natural resources (5.3%), education and health services (3.2%), and other services (3.2%) industries.
- Two industries, information and professional and business services, have fewer jobs now than one year ago.
- Austin’s seasonally adjusted unemployment rate is 3.6% in October, up from 3.5% in September.
Nonfarm payroll jobs
Jobs in Austin are up by 22,500 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 1,600 or 0.1% from September to October.
Austin’s YOY increase of 1.7% makes it the 14th best performing among the 50 largest metros. Three Texas metros, San Antonio (2.3%), Houston (1.8%), and Dallas (1.8%) rank in the top 10 this month. Job growth is 1.9% for the top 10 fastest growing metro areas in aggregate. Fort Worth (1.7%) ranks 12th. Seven of the 50 largest metros saw negative job growth over the last 12 months.
For the year ending in October, private sector job growth in the Austin MSA is 1.5%, or 17,000 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 relatively 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 at 1.9%, due to slower (1.8%) growth in the government sector. For the nation, private sector job growth was 1.2% for the 12 months ending in October with all but two private industries adding jobs. Overall job growth was slightly higher at 1.3%, due to relatively strong 2.0% government sector growth.
Jobs in October are up by 11,500 jobs or 0.8% from September in the not-seasonally-adjusted series for Austin. The seasonally adjusted series also shows positive job growth with a gain of 1,600 jobs or 0.1%. Seasonally adjusted job growth was mixed across the other major Texas metros. Dallas was up by 0.2% and San Antonio by 0.1%, but Fort Worth was essentially unchanged, and Houston was down by 0.1%. Statewide, seasonally adjusted jobs are down by 10,600 jobs or 0.1%. Nationally, seasonally adjusted jobs are essentially unchanged.
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 (5.3% or 4,600 jobs), while education and health services added the most jobs (5,000 or 3.2%). Other services and leisure and hospitality were also relatively fast growing (3.2% and 2.8% respectively). The two industries with negative YOY growth were information (down 3.1% or 1,600 jobs) and professional and business services (0.6% or 1,800). Manufacturing jobs are unchanged from a year ago.
While this is another month where we are seeing fewer professional and business services jobs than a year ago, jobs in the industry have been on the upswing for the last three months. At 286,900, October jobs are higher than all past months except October and November 2023 and February 2024. Jobs are currently 5,300 or 1.8% below the industry’s November 2023 peak, but above the average number of jobs in 2023 by 0.4%. 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.
While the YOY numbers for professional and business services has been concerning in recent months, positive growth in August, September and October may be notable. The addition of 7,000 jobs by the industry over the last three months represents 27% of the 25,500 jobs added overall and that’s comparable to the long term average for the industry.
Statewide, the private industries with the most significant YOY growth are construction and natural resources and financial activities, increasing 3.4% and 3.2% respectively. No industries lost jobs over the last 12 months.
Nationally, education and health services (3.8%) and construction and natural resources (2.4%) were the leading private sector growth industries over the last 12 months. Manufacturing lost jobs (0.4%), as did professional and business services (0.1%).
Over the last 12 months, the net gain for private service-providing industries in Austin is 12,400 jobs, or 1.2%. Employment in goods-producing industries is up by 4,600 jobs or 2.9%. Statewide, private service-providing industries are up 173,400 or 1.7%, and goods-producing industries are up 60,900 or 3.0%.
With each third-Friday release of labor market data, the Dallas Fed revises their Texas Employment Forecast for 2024. In October, the forecast was relatively strong, estimating that statewide jobs would increase 2.5% in 2024. Friday’s forecast reduces the Dallas Fed’s estimate of Texas job creation in 2024 to 2.1%. Jesus Cañas, Dallas Fed senior business economist stated, “Texas employment contracted as 6,600 jobs were lost in October. Losses were concentrated in the private sector services, particularly professional and business services, although some sectors expanded such as information and financial activities. Government and goods producing sectors also expanded. In the major metropolitan areas, employment grew in San Antonio, Austin and Fort Worth, while it fell in Houston and Dallas.” In addition to seasonally adjusted job growth through October, the forecast is based on projected national GDP, oil futures prices, and the Texas and U.S. leading indexes.
Additional graphs: The trend since 2000 for six large industries and six small industries.
Labor force, employment & unemployment
We also now have October 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 November 27. In September, Austin had the 20th lowest rate of unemployment among the 50 largest metros. Data for October show Austin sustains its superior performance relative to the state and the other major Texas metros.
In October, Austin’s not-seasonally-adjusted unemployment rate is 3.5%, above the 3.3% rate seen a year ago. Rates in the other major Texas metros range from 3.9% in Dallas, Fort Worth and San Antonio to 4.5% in Houston. The Dallas, Fort Worth, Houston, and San Antonio rates are 0.3 to 0.5 percentage points higher than last year. The statewide rate is now 4.1%, up from 3.7% in October of last year. The national unemployment rate is 3.9%, up from 3.6% a year ago.
October unemployment rates are 3.4% in Travis County, 3.5% in Hays County, 3.6% in Bastrop County, 3.7% in Williamson County, and 3.8% in Caldwell County.
On a seasonally adjusted basis, Austin’s October unemployment rate is 3.6%, up from 3.5% in September. The last time Austin’s seasonally adjusted unemployment rate was as high as 3.6% was September 2021. The statewide and the national rate in October is 4.1%, both unchanged from September.
Among Texas’ other major metros, San Antonio is at 3.9%, Dallas and Fort Worth are at 4.0%, and Houston is at 4.6%. 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 October 2023, Austin’s number of unemployed was 47,657. Over the last 12 months, unemployed increased by 5,043 or 10.6%, to 52,700. 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 40,774 persons or 2.8% from one year ago, while persons employed increased by 35,731 or 2.5%.
Additional graphs – Labor force & employment: Texas and United States
Texas’ labor force growth (449,997 or 3.0%) over the last 12 months exceeds the growth in the number employed (372,046 or 2.6%). Thus, the number of unemployed increased by 77,951 or 13.8%. Nationally, October’s labor force is up by 795,000 or 0.5%, while the number employed is above the level of a year ago by 262,000 or 0.2%, and 533,000 more people (8.7%) 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 the first 10 months of 2024 with YOY growth averaging 1.9%. For October, YOY growth is 1.7%—which ranks Austin 14th among the top 50 metros.* That’s a substantial improvement over recent performance. 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 2.1%. Texas’ YOY growth for October is 1.9%.
Austin’s YOY job growth has been lower than the state’s for seven 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 four of the 10 months 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. In fact, Austin returned to the top 10 best performing major metros in July, having the ninth lowest unemployment rate, and came close in August, ranking 12th. September’s rate set Austin back, to 20th. October estimates for all U.S. metros are not yet available.
The Texas Workforce Commission and the U.S. Bureau of Labor Statistics will release November estimates on December 20.
* Note that the job growth ranking reflects percent change beyond the one-digit level of rounding displayed (Austin’s percent change being 1.67% at two-digit rounding). At one-digit rounding, Austin’s 1.7% could also be represented as 4-way tie for 11 th place for YOY growth—making the metro’s performance similar to what we saw last month.
