Statewide NewsTexas Unemployment Dips Below 4 Percent for the First Time Since Pandemic Began

The state's unemployment rate has been steadily improving since the middle of 2020 after the pandemic's initial brunt had passed.
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It’s been nearly three years since Texas’ monthly unemployment rate began with a three, but in December the state again hit those numbers as the Texas Workforce Commission (TWC) reported a rate of 3.9 percent.

Last month, the state added 29,500 nonfarm jobs, setting another record employment — the fourteenth month in a row — of 13,705,500. Over 530,000 individuals were registered as unemployed in the state, and the unadjusted rate sits at 3.6 percent. The nationwide unemployment rate was 3.5 percent in December.

Texas leads the nation in offering businesses the freedom to flourish and grow,” Gov. Greg Abbott said in a statement. “Our skilled and growing workforce is a magnet for job creators. I am proud that we’ve again hit a new historic high for total jobs, putting even more Texans on the path to prosperity. We live in a state of infinite possibilities, and in the legislative session ahead, we will continue working together to keep Texas the land of opportunity.”

The mining and logging industry added 2,100 jobs — a nearly 1 percent increase from the previous month — which includes 1,300 from the upstream oil and gas industry.

“It is encouraging to see upstream employment end the year on a positive note, particularly as jobs seem to be contracting in the high-tech industry,” said Todd Staples, President of the Texas Oil & Gas Association. “As the new year progresses, we are hopeful that demand for oil and natural gas remains strong and that policies for growth are supportive so that job creation and capital deployment remains positive.”

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Mining and logging employment was 21 percent higher in December 2022 than it was 12 months prior.

The largest numerical increase came from the service industry, which added 21,200 jobs — continuing its drastic recovery from the depths of the pandemic as the most lockdown-affected industry.

From a metropolitan perspective, Amarillo and Austin-Round Rock continue to pace the field with the lowest unemployment rates at 2.6 and 2.7 percent respectively. In total, four metro areas posted an unemployment rate in the 2 percent range and 15 settled in the 3 percent range.

The McAllen-Edinburg-Mission metro at 6.8 percent and the Beaumont-Port Arthur metro at 6.3 percent bring up the rear with the highest urban unemployment rates in the state.

It’s been a long road for the state, and the globe, since the COVID-19 pandemic and subsequent broad government-mandated shutdowns. The state had been coming off record unemployment lows in the late months of 2019 — Texas hit 3.5 percent seven out of 12 months, even reaching 3.4 percent in May and June.

Data from the Texas Labor Market Information database.

In February 2020, the unemployment rate was 3.5 percent before calamity occurred.

It jumped 1.6 percent in March as states and local governments, including Texas, began to issue their closure orders. The following month, when all the closures were fully in place, the rate ballooned to 13.5 percent as 1.7 million Texans were without jobs — a level not seen since the Great Depression.

Since May 2020, the unemployment rate has mostly waned as commerce returned and businesses were permitted to begin operations again. Last year it opened below 5 percent unemployment and closed below 4 percent. Still, more than half a million Texans are classified as unemployed, defined by the Bureau of Labor Statistics (BLS) as “people who are jobless, looking for a job, and available for work.” That doesn’t count anyone who is jobless and isn’t seeking one, or those unable to work and drawing disability.

In November 2022, per the BLS, Texas had 87,000 job openings; December numbers have yet to be released. But as of the November numbers, Texas fell within the bottom tertile of state-plus-Washington, D.C. unemployment rates.

Even with the commercial recovery inflation remains a problem, though an improving one. The December Consumer Price Index — the inflation rate measured as price increases over the previous 12 months — came in at 6.5 percent. Only a couple of months earlier, that number eclipsed 8 percent.

Nonetheless, consumers are paying more for goods and services due to a multitude of factors, including the cost of labor for the limited pool of applicants.

That inflation played a sizable role in Texas’ record $32.7 billion projected treasury surplus; that pot of money is the premier theme for the 88th legislative session.

Texas has seen a trendline of steady employment improvement despite the large population growth of the state, which adds roughly the population of Corpus Christi every year.

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Brad Johnson

Brad Johnson is a senior reporter for The Texan and an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.

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