Job Growth & Unemployment, October 22, 2024
Beverly Kerr, Vice President, Research
Insights
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- Austin is the 11th best performing among the top 50 metros, adding 27,300 jobs, or 2.0% growth, in the year ending in September.
- The fastest job growth over the last 12 months occurred in Austin’s construction and natural resources (6.3%) and leisure and hospitality (4.8%) industries.
- One industry, information, lost jobs over the last 12 months (4.6%).
- Austin’s seasonally adjusted unemployment rate is 3.5% in September, unchanged from August.
Nonfarm payroll jobs
Austin’s year-over-year job growth increased to 2.0% or 27,300 jobs, in September 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 4,800 or 0.4% from August to September.
Austin’s YOY increase of 2.0% makes it the 11th best performing among the 50 largest metros. Two Texas metros, Houston (2.2%) and San Antonio (2.4%), rank in the top 10 this month. Job growth is 2.3% for the top 10 fastest growing metro areas in aggregate. Dallas (2.0%) and Fort Worth (1.9%) rank 13th and 16th respectively. Four of the 50 largest metros saw negative job growth over the last 12 months.
For the year ending in September, private sector job growth in the Austin MSA is 2.0%, or 22,800 jobs, with gains across 10 of the 11 major private industry sectors. Total job growth was also 2.0% as the government sector, which accounts for 15% of metro area employment, grew by a roughly comparable 2.3%.
Texas saw net private sector job growth of 2.3% with all private industry groups adding jobs over the last 12 months. Total job growth was at 2.2%, due to slower (1.5%) growth in the government sector. For the nation, private sector job growth was 1.4% for the 12 months ending in September with all but one private industry adding jobs. Overall job growth was slightly higher at 1.5%, due to relatively strong 2.1% government sector growth.
Jobs in September are up by 10,200 jobs or 0.8% from August in the not-seasonally-adjusted series for Austin. The seasonally adjusted series also shows positive job growth with a gain of 4,800 jobs or 0.4%. Seasonally adjusted job growth was also positive across the other major Texas metros. Dallas was also up by 0.4%, Fort Worth by 0.2%, Houston by 0.2%, and San Antonio by 0.1%. Statewide, seasonally adjusted jobs are up by 29,200 jobs or 0.2%. Nationally, seasonally adjusted jobs are up from August by 254,000 or 0.2%.
In Austin, 10 of the 11 major private industry sectors added jobs over the last 12 months. Construction and natural resources is the fastest growing (6.3% or 5,300 jobs) and leisure and hospitality added the most jobs (7,000 or 4.8%). The industry with negative YOY growth was information (down 4.6% or 2,400 jobs).
For Austin’s professional and business services industry, September brings a return to positive YOY growth after three months of negative YOY growth. Current employment (284,000) is roughly the same as the industry’s average employment over the last 24 months (285,100). The last peak for the industry was 292,200 jobs in November 2023 and jobs in September are 8,200 (2.8%) below that peak. Information, with 50,100 jobs in September, is 4,600 (8.4%) below its February 2023 peak. While professional and business services growth has been flat, information jobs in 2024 are on average 5.0% below 2023.
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. If information and professional and business services were excluded, the region’s job growth over the last 12 months would be 2.9% instead of 2.0%. Many of the tech companies announcing layoffs over the last year-plus are in these industries. The public announcements of these layoffs often lacked detail for local impact, but plainly Austin is seeing its share.
While the YOY numbers for these sectors have been concerning in recent months, positive growth in August and September for professional and business services may be notable. Professional and business services jobs grew by 4,100 jobs in August and September, which represents 26% of net jobs added in the last two months.
Statewide, the private industries with the most significant YOY growth are construction and natural resources and other education and health services, increasing 3.8% 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 (2.5%) were the leading private sector growth industries over the last 12 months. Manufacturing lost jobs (0.2%).
Over the last 12 months, the net gain for private service-providing industries in Austin is 17,300 jobs, or 1.8%. Employment in goods-producing industries is up by 5,500 jobs or 3.5%. Statewide, private service-providing industries are up 215,000 or 2.2%, and goods-producing industries are up 63,700 or 3.2%.
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 and in August the forecast was revised down to 1.9% and then down to 1.6%. The forecast improved in September and indicated that Texas jobs would increase 2.2% in 2024. Friday’s forecast again increases the Dallas Fed’s estimate of Texas job creation in 2024—now to 2.5%. Jesus Cañas, Dallas Fed senior business economist stated, “Texas employment growth was strong again in September . . . Employment growth has normalized to a rate more consistent with trend growth. This comes after a summer of volatile data characterized by storms that disrupted labor markets in large parts of the state.” In addition to job growth through September, 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 September 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 October 30. In August, Austin had the 12th lowest rate of unemployment among the 50 largest metros. Data for September show Austin sustains its superior performance relative to the state and the other major Texas metros.
In September, Austin’s not-seasonally-adjusted unemployment rate is 3.4%, just under the 3.5% rate seen a year ago. Rates in the other major Texas metros range from 3.8% in Fort Worth and San Antonio to 4.4% in Houston. Dallas is at 3.9%. Dallas, Fort Worth, Houston, and San Antonio are 0.1 to 0.2 percentage points higher than last year. The statewide rate is now 4.1%, up from 3.9% in September of last year. The national unemployment rate is 3.9%, up from 3.6% a year ago.
September unemployment rates are 3.3% in Travis County, 3.4% in Hays County, 3.5% in Bastrop County, and 3.6% in Caldwell and Williamson Counties.
On a seasonally adjusted basis, Austin’s September unemployment rate is 3.5%, unchanged from August. The last time Austin’s seasonally adjusted unemployment rate was as high as 3.5% was October 2021. The statewide rate in September is 4.1%, unchanged from August. The national rate is 4.1%, down from 4.2% in August.
Among Texas’ other major metros, San Antonio is at 3.7%, Dallas and Fort Worth are at 3.8%, and Houston is at 4.4%. 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 has edged down from one year ago, the number unemployed has increased slightly. In September 2023, Austin’s number of unemployed was 50,492. Over the last 12 months, unemployed increased by 1,048 or 2.1%, to 51,540. 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 40,693 persons or 2.8% from one year ago, while persons employed increased by 39,645 or 2.8%.
Additional graphs – Labor force & employment: Texas and United States
Texas’ labor force growth (426,052 or 2.8%) over the last 12 months exceeds the growth in the number employed (390,167 or 2.7%). Thus, the number of unemployed increased by 35,885 or 6.0%. Nationally, September’s labor force is up by 851,000 or 0.5%, while the number employed is above the level of a year ago by 377,000 or 0.2%, and 475,000 more people (7.9%) 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 nine months of 2024 with YOY growth averaging 2.0%. For September, YOY growth is also 2.0%—which ranks Austin 11th 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 September is 2.2%.
Austin’s YOY job growth has been lower than the state’s for six 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 has outperformed the state in only two 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 estimates for all U.S. metros are not yet available.
The Texas Workforce Commission and the U.S. Bureau of Labor Statistics will release October estimates on November 15.
