EnergyStatewide NewsTexas’ Unemployment Rate Rises to 8.3% as Midland-Odessa Struggles

Despite adding a net of 40,700 jobs, Texas' unemployment rate increased from August to September due to the workforce contracting.
October 16, 2020
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The conclusion of September brought with it an increase in Texas’ unemployment rate, jumping 1.5 percent from August.

Since the March shutdown orders, Texas’ unemployment skyrocketed from historic lows to historic highs.

Data from the Texas Workforce Commission’s Local Area Unemployment Statistics.

According to the Texas Workforce Commission (TWC), the civilian labor force shrunk as more individuals stopped actively looking for work.

This will be affected by the reinstatement of the work search requirement for unemployment benefits. Those applying must show an “active effort to obtain new employment.”

TWC Chairman Bryan Daniel said in a statement, “Despite the increase in the overall unemployment rate, Texas had a net gain in jobs for September. TWC continues to implement tools to spur additional job growth as a critical part of our efforts to grow the state’s economy.”

The Texan Mug

The net gain in jobs landed at 40,700 for the month of September. A large portion of those came from the Leisure and Hospitality sector, which has been severely inhibited by the shutdowns.

Government also added 5,400 jobs.

The Financial Activities industry — which includes real estate, accounting firms, insurance, and banks — contracted the most, losing 2,100 jobs.

Compared with the same month of 2019, the Mining and Logging industry is suffering the most, down 22.6 percent.

The unemployment rates in the heart of Texas’ energy sector, Midland and Odessa, have increased from the previous month. Midland’s increased from 8.1 to 9.6 percent and Odessa’s jumped two points to 13.2 percent.

Texas’ oil production has decreased 21 percent since its high in January and the price per barrel still remains about $20 lower than it was at the beginning of 2020. The number of producing oil wells has also dropped but by a modest two percent.

When the market first took a hit from the shutdown orders, it caused demand to crater and a global supply glut.

Producers responded initially by ramping up production to try and make up the lost revenues per barrel. But that only further exacerbated the downward pressure in value caused by the already existing upward pressure on supply. With demand drastically-depressed, the glut continued to build resulting in a historic -$40 per barrel storage trading price in April.

Since then, the market has leveled out some, but the economic effects are still rippling through the oil and gas industry as coronavirus not only upended projections on which future planning is based but in many instances the very industrial structures in place already.

The rate in McAllen-Edinburg-Mission also remains high at 12.8 percent unemployed as well as Beaumont-Port Arthur at 12.5 percent.

Amarillo has the lowest unemployment rate at 5.1 percent.

The national rate for September was 7.7 percent. This is only the second month in the 2019 and 2020 calendar years that Texas’unemployment rate eclipsed the national one.

Texas, and the nation, has a long way to go before economic recovery can realistically be claimed — and the lingering shutdowns, to varying degrees, will continue to be roadblocks on the way.

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Brad Johnson

Brad Johnson

Brad Johnson is 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 watching and quoting Monty Python productions.