- Austin added 24,400 net new jobs, growth of 2.3%, in the 12 months ending in July, making Austin the 17th fastest growing major metro.
- Information grew by 6.6% (2,200 jobs), making it Austin’s fastest growing industry, while professional and business services added the most jobs, 6,500 (or 3.4%), over the last 12 months.
- Austin's seasonally adjusted unemployment rate is 2.7%, up from 2.6% in June.
The Austin metropolitan area added 24,400 net new jobs, or 2.3%, in the 12 months ending in July, 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 2.3% growth makes it the 17th best performing among the 50 largest metro areas. Dallas and Houston, gaining 3.9% and 3.0% respectively, made the top ten. Fort Worth and San Antonio, gaining 2.5% and 1.8% respectively, ranked 12th and 27th. (See a SIDEBAR at the bottom of this page for comments about signals that the monthly CES estimates may be currently understating job growth in Austin.)
For the year ending in July, private sector growth in the Austin MSA is 2.7%, or 24,000 jobs, with all private industry divisions, but one, adding jobs. Austin's sizable government sector (17% of jobs) grew by only 400 jobs or 0.2%, thus bringing the overall growth rate to 2.3%.
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 (0.4%). For the nation, private sector growth is 1.7% for the 12 months ending in July with all private industries, but two, adding jobs. Overall job growth is a more modest 1.5% because of minor (0.4%) government sector growth.
Jobs in July are down from the preceding month by 7,600 jobs or 0.7% in the not-seasonally-adjusted series for Austin. In the seasonally adjusted series, growth is positive, up by 3,500 jobs or 0.3%. Seasonally adjusted jobs are up by 0.5% in Dallas, 0.4% in Fort Worth, 0.3% in San Antonio, and 0.1% in Houston. Statewide, seasonally adjusted jobs are up 35,200 or 0.3%. Nationally, seasonally adjusted jobs are up from June by 0.1%.
In Austin, professional and business services added the most jobs, 6,500 (3.4%), over the last 12 months. The fastest growing industry was information which grew by 6.6% or 2,200 jobs. Also growing at faster-than-average rates are wholesale trade (5.5% or 2,800); construction and natural resources (4.4% or 2,900); transportation, warehousing and utilities (3.7% or 800); and financial activities (3.0% or 1,900).
Statewide, construction and natural resources grew fastest, by 5.9%, over the last 12 months. Other relatively fast growing industries included leisure and hospitality (4.3%); wholesale trade (4.0%); transportation, warehousing and utilities (3.9%); other services (3.8%); and financial activities (3.6%). Information jobs fell by 0.3%.
Nationally, construction and natural resources and education and health services grew fastest, both adding 2.6% over the 12 months ending in July. Transportation, warehousing, and utilities (2.4%); professional and business services (2.2%); and leisure and hospitality (2.0%) were also relatively fast growing. Information and retail trade lost jobs (both down 0.5%).
The net gain for private service-providing industries in Austin is 19,500 jobs, or 2.5%, over the last 12 months. Employment in goods producing industries is up by 4,500 jobs or 3.6%. Statewide, private service-providing industries are up 246,300, or 2.8%, and goods producing industries are up 86,200 jobs, or 4.6%.
We also now have July 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 August 28. In June, Austin had the third lowest rate of unemployment among the 50 largest metros (San Francisco and San Jose had the lowest rates).
Unemployment numbers for July show Austin’s performance relative to the state and other major Texas metros being sustained. In July, Austin is at 2.9%, while the other major metros range from 3.3% in San Antonio to 4.0% in Houston. Dallas and Fort Worth are at 3.4% and 3.5% respectively. Austin’s rate one year ago was 3.1%. The rates in the other major Texas metros are also improved from a year ago. The statewide not-seasonally-adjusted rate is now 3.7%, down from 4.1% in July of last year. The national unemployment rate is 4.0%, improved from 4.1% a year ago.
Within the Austin MSA, Travis County has the lowest unemployment rate in July, at 2.8%, while Caldwell County has the highest at 3.8%. The rate is 3.0% in Williamson and Hays Counties and 3.5% in Bastrop County.
On a seasonally adjusted basis, Austin’s July unemployment rate is 2.7%, up from 2.6% in June. The statewide seasonally adjusted rate is 3.4% in July, unchanged from June. The national rate is 3.7% in July, also unchanged from June.
Among Texas’ major metros, San Antonio has the next lowest seasonally adjusted rate at 3.1%, while Dallas is at 3.2%, Fort Worth is at 3.3%, and Houston is at 3.8%. Each metro’s rate is up from June. 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 July 2018, Austin’s number of unemployed was 37,654. Over the last 12 months, the unemployed declined by 2,691 or 7.1%, to 34,963. 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 12,745 persons or 1.1% from one year ago, while persons employed increased by 15,436 or 1.3%.
Texas’ employment growth (221,599 or 1.7%) also exceeds labor force growth (178,152 or 1.3%). Thus, the number of unemployed decreased by 43,447 or 7.7%. Nationally, July civilian labor force is up by 1.2 million or 0.7%, while employed is above the level of a year ago by 1.4 million or 0.9%, and 174,000 fewer people (2.6%) are unemployed.
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.
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 March 2019, gives some evidence that Austin’s recent 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 July is 3.0%, which is substantially higher than the BLS/TWC estimate of 2.3% in their seasonally adjusted series (year-over-year growth in the not-seasonally-adjusted data is also 2.3%).
The TWC released a new quarter of QCEW data (and revised 2018 data) along with Friday’s release of CES data through July. Note that the Dallas Fed’s series, which is published later the same day, is still benchmarked through ‘18Q4 rather than ‘19Q1. Since QCEW revised upward 2018 and since March 2019 is a robust 3.8% ahead of March 2018, it seems reasonable that next month’s Dallas Fed release of their early-benchmarked Austin jobs series will likely still point to 3% or better year-over-year growth.
Due to issues of timeliness and for comparison to other geographic areas, this article, like most reporting elsewhere, remains focused 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.
As a relatively fast growing metro, it may be that the sample survey of employers in our area sometimes becomes insufficiently representative. With unemployment as low as it has been in Austin over the last couple of years, and for other reasons, such as a probable decrease in migration due to similarly low unemployment rates elsewhere, it is reasonable to expect job growth to slow, but with the divergence between CES and QCEW data we see in ‘18Q4 and ‘19Q1, there is a basis to question if growth is currently quite as low as 2.3%.
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