- Austin added 37,800 net new jobs, growth of 3.5%, in the 12 months ending in December, making Austin the 2nd fastest growing major metro.
- Other services grew by 8.4% (3,800 jobs), making it Austin’s fastest growing industry, while professional and business services added the most jobs, 10,600 (or 5.6%), over the last 12 months.
- Austin's seasonally adjusted unemployment rate is 2.6%, down from 2.7% in November.
Nonfarm payroll jobs
The Austin metropolitan area added 37,800 net new jobs, or 3.5%, in the 12 months ending in December, according to Friday's releases of preliminary Current Employment Statistics (CES) payroll jobs numbers by the Texas Workforce Commission (TWC) and the U.S. Bureau of Labor Statistics (BLS).
Austin’s 3.5% growth makes it the 2nd best performing among the 50 largest metro areas. Dallas, San Antonio, and Houston, gaining 4.0%, 3.2%, and 2.8% respectively, also made the top ten. Fort Worth, gaining 1.8%, ranked 25th.
For the year ending in December, private sector growth in the Austin MSA is 3.9%, or 35,200 jobs, with all private industry divisions adding jobs. Austin's sizable government sector (17% of jobs) grew by a moderate 2,600 jobs or 1.4%, thus bringing the overall growth rate to 3.5%.
Texas saw net private sector job growth of 3.1% with all private industries, but one, adding jobs over the last 12 months. Total job growth was 2.7% as the government sector, which accounts for nearly 16% of total state employment, saw slight growth (0.8%). For the nation, private sector growth is 1.5% for the 12 months ending in December with all private industries adding jobs. Overall job growth is slightly under that, at 1.4%, because of slower (0.7%) government sector growth.
Jobs in December are up by 6,100 or 0.5% from November in the not-seasonally-adjusted series for Austin. In the seasonally adjusted series, growth is stronger, up by 7,100 jobs or 0.6%. Seasonally adjusted jobs are up by 0.5% in Dallas, 0.2% in San Antonio, 0.2% in Houston, and down 0.2% in Fort Worth. Statewide, seasonally adjusted jobs are up 29,800 or 0.2%. Nationally, seasonally adjusted jobs are up from November by 0.1%.
In Austin, professional and business services added the most jobs, 10,600 (5.6%), over the last 12 months. The fastest growing industry was other services (repair and maintenance, personal and laundry services, and other activities), which grew by 8.4% or 3,800 jobs. Also growing at faster-than-average rates are construction and natural resources (8.2% or 5,200); leisure and hospitality (6.1% or 7,800); and transportation, warehousing and utilities (5.3% or 1,200).
Statewide, education and health services added the most jobs, 57,000 (3.4%), over the last 12 months. The fastest growing industries were financial activities (4.8%), other services (4.7%), and construction and natural resources (4.6%). Information jobs fell by 1.0%.
Nationally, education and health services grew fastest, adding 2.7% over the 12 months ending in December. Leisure and hospitality (2.5%) and professional and business services (1.9%) were also relatively fast growing. No industries lost jobs.
The net gain for private service-providing industries in Austin is 29,800 jobs, or 3.8%, over the last 12 months. Employment in goods producing industries is up by 5,400 jobs or 4.3%. Statewide, private service-providing industries are up 263,100, or 3.0%, and goods producing industries are up 64,900 jobs, or 3.4%.
(See a SIDEBAR at the bottom of this page for comments about the Current Employment Statistics data from the Texas Workforce Commission and U.S. Bureau of Labor Statistics vis-à-vis alternative estimates.)
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 until February 5. In November, Austin had the 9thlowest rate of unemployment among the 50 largest metros.
Austin’s unemployment rate has averaged below 3.0% for the last two years and this is frequently called out as a signal that local employers are coping with a very tight labor market. Austin’s rate is one of the lowest among major metros, as noted above. But historically low unemployment rates are prevalent across the country—27 of the 50 largest metros have unemployment rates below 3.0% and only eight large metros have an unemployment rate above 3.5%. As competitive as the labor market may be for growing employers in Austin, comparable circumstances prevail in most major U.S. metros.
Unemployment numbers for December show Austin’s performance relative to the state and other major Texas metros being sustained. In December, Austin is at 2.4%, while the other major metros range from 2.8% in San Antonio to 3.6% in Houston. Dallas and Fort Worth are each at 2.9%. Austin’s rate one year ago was 2.5%. The rates in the other major Texas metros are also improved from a year ago, except Houston, which is unchanged. The statewide not-seasonally-adjusted rate is now 3.3%, unchanged from December of last year. The national unemployment rate is 3.4%, improved from 3.7% a year ago.
Within the Austin MSA, Travis County has the lowest unemployment rate in December, at 2.3%, while Caldwell County has the highest at 2.9%. The rate is 2.5% in Hays County, 2.6% in Williamson County, and 2.8% in Bastrop County.
On a seasonally adjusted basis, Austin’s December unemployment rate is 2.6%, down from 2.7% in November; the statewide rate is 3.5%, up from 3.4%; and the national rate is unchanged at 3.5%.
Among Texas’ major metros, San Antonio has the next lowest seasonally adjusted rate at 3.0%, while Dallas is at 3.1%, Fort Worth is at 3.2%, and Houston is at 3.7%. Each metro’s rate is 0.1 points below November. Seasonally adjusted unemployment rates for Texas metros are produced by the Federal Reserve Bank of Dallas. (The TWC also produces seasonally adjusted rates for Texas metros, but publication lags the Dallas Fed’s data.)
With Austin’s unemployment rate down from one year ago, the number unemployed has also fallen. In December 2018, Austin’s number of unemployed was 33,102. Over the last 12 months, the unemployed declined by 3,074 or 9.3%, to 30,028. This is due to a larger increase in the number employed, compared to labor force. The Austin metro’s civilian labor force (employed plus unemployed) increased by 30,442 persons or 2.5% from one year ago, while persons employed increased by 33,516 or 2.9%.
Texas’ employment growth (284,414 or 2.1%) also exceeds labor force growth (253,056 or 1.8%). Thus, the number of unemployed decreased by 31,358 or 6.2%. Nationally, December civilian labor force is up by 1.5 million or 0.9%, while employed is above the level of a year ago by 2.0 million or 1.3%, and 526,000 fewer people (8.7%) are unemployed.
The TWC and the BLS will release January estimates on March 13.
The Chamber’s Economic Indicators page provides up-to-date historical spreadsheet versions of Austin, Texas and U.S. data for both the Current Employment Statistics (CES) and Local Area Unemployment Statistics (LAUS) data addressed above.
While this month’s job growth on a year-over-year basis is in the ballpark of what we think of as typical, through most of the last year, CES growth estimates have been much lower. As we’ve noted in the last several monthly articles about the CES data, when we see atypical growth rates in Austin’s nonfarm payroll jobs data, we sometimes look at an alternative payroll jobs dataset, the Quarterly Census of Employment and Wages (QCEW) to see how consistent the two datasets appear. QCEW, which is derived from the universe of unemployment insurance-covered employer payroll records, informs the annual benchmark revisions to the sample-survey-based CES data. QCEW data, which is now available through June 2019, gives some evidence that Austin’s 2019 job growth may be more robust than preliminary CES data indicates.
The Federal Reserve Bank of Dallas produces a version of nonfarm payroll jobs that benchmarks to QCEW data quarterly instead of annually. According to the Dallas Fed’s early-benchmarked and seasonally adjusted data, Austin’s job growth for the year ending in December is 3.5%. This month, that job growth matches the BLS/TWC, but that has not been the case for over a year. While the Dallas Fed series presents average growth of 3.3% for 2019 over 2018, the BLS/TWC series presents average growth of 2.3%.
At this point, the Dallas Fed’s version of nonfarm payroll jobs has been benchmarked against three quarters of QCEW data that is not reflected in the BLS/TWC series, which will not be benchmarked against QCEW until March 2020. In March, BLS/TWC will revise the CES estimates based on QCEW data through September 2019.
Due to issues of timeliness and for comparison to other geographic areas, this article, like most reporting elsewhere, focuses on the BLS/TWC CES data, but it can be helpful to be aware of limitations of the sample survey and the potential for actual growth to be higher or lower than preliminary estimates indicate. Many types of investment decisions—residential or commercial construction, for example—are made based on a market’s current job growth performance, so it can be unfortunate to misidentify market conditions.
Note that the Excel file of nonfarm payroll jobs time series data on the Chamber’s Economic Indicators page includes not only the CES data (total, private, and major industry sectors), but also the QCEW series (total and private industry), and the seasonally adjusted and early-benchmarked Dallas Fed series (total).
Related Categories: Central Texas Economy in Perspective