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September 19, 2017 - Job Growth & Unemployment

Posted By Beverly Kerr | Sep 19, 2017
Central Texas Economy in Perspective Print Article Skyline
  • Austin added 21,100 net new jobs, growth of 2.1%, in the 12 months ending in August, making Austin the 22nd fastest growing major metro.
  • Construction and natural resources was the fastest growing industry in the Austin MSA, increasing jobs by 6.3% (3,800 jobs) over the last 12 months. Leisure and hospitality added the most jobs—5,800 (4.7% growth).
  • Manufacturing jobs grew 4.4% year-over-year, outpacing private industry growth for the fifth month in a row.
  • Austin's seasonally adjusted unemployment rate is 3.0%, unchanged from July. The rate was 3.3% one year ago.

The Austin metropolitan area added 21,100 net new jobs, or 2.1%, in the 12 months ending in August, according to Friday's releases of preliminary payroll jobs numbers by the Texas Workforce Commission (TWC) and the U.S. Bureau of Labor Statistics (BLS).

Austin’s 2.1% growth makes it the 22nd best performing among the 50 largest metro areas. Dallas, gaining 2.8%, ranked seventh, while the other major Texas metros missed the top ten. Fort Worth grew by 2.6% (11th), San Antonio grew by 2.3% (20th), while Houston grew by 1.8% (31st) between August 2016 and August 2017.[1]

For the year ending in August, private sector job growth in the Austin MSA is 2.2%, or 18,100 jobs, and with seven private industry divisions adding jobs and four losing jobs. Austin's sizable government sector (nearly 18% of jobs) saw slighter growth over the last 12 months, gaining 3,000 jobs or 1.8%, thus bringing the overall job growth rate to to 2.1%.

Texas saw net private sector job growth of 2.5% with all private industries, except two, adding jobs over the last 12 months. Total job growth was 2.4% as the government sector, which accounts for over 16% of total state employment, gained 1.6%. For the nation, private sector growth is 1.7% for the 12 months ending in August with all private industries, but two, adding jobs. Overall job growth is a more modest 1.5% because the government sector was essentially unchanged.

Jobs in August are down from the preceding month by 1,900 jobs or -0.2% in the not-seasonally-adjusted series for Austin, while on a seasonally adjusted basis, jobs are essentially unchanged (down by 100 or 0.0%). Seasonally adjusted jobs are up by 0.8% in San Antonio, up by 0.1% in Dallas, and unchanged in Houston and Fort Worth. Statewide, seasonally adjusted jobs are essentially unchanged in August (up by 5,500 or 0.0%). Nationally, seasonally adjusted jobs rose 0.1%.

In Austin, the industry adding the most jobs is leisure and hospitality which grew by 5,800 jobs, or 4.7%, over the last 12 months. Construction and natural resources grew fastest at 6.3% and added 3,800 jobs. Also growing at faster-than-average rates are education and health services (4.6% or 5,300 jobs), manufacturing (4.4% or 2,500 jobs), transportation, warehousing and utilities (3.9% or 700 jobs), and wholesale trade (3.6% or 1,800 jobs). For the fifth month in a row, manufacturing job growth outpaces private job growth. The last time manufacturing grew at a greater rate than the growth rate for all private industries was a three month period during 2011. The only other occasions when manufacturing posted faster-than-average growth rates were before the dot com recession of the early 2000s.

Uncommon for Austin, there are four industries with fewer jobs than one year ago: information (-900 or -3.2%), professional and business services (-1,900 or -1.1%), retail trade (-400 or -0.4%), and financial activities (-100 or -0.2%). With the exception of information which has been negative for the last five months, this is the first instance of negative growth for these industries since the end of the Great Recession. Click here for a collection of graphs illustrating the performance of each industry over the last decade.

Statewide, construction and natural resources grew fastest, with jobs increasing 4.6% over the last 12 months. The other relatively fast growing industries included manufacturing (4.2%), financial activities (3.4%), transportation, warehousing and utilities (3.4%), professional and business services (3.3%), and other services (3.3%). Jobs declined in information (5.5%) and retail trade (0.5%).

Nationally, construction and natural resources grew fastest, adding 3.5% over the 12 months ending in August. Professional and business services (3.0%), education and health services (2.1%), and leisure and hospitality (2.0%) were also relatively fast growing. Information jobs fell by 2.5% and retail trade jobs are down 0.2%.

The net gain for private service-providing industries in Austin is 11,800 jobs, or 1.7%, over the last 12 months. Employment in goods producing industries is up by 6,300 jobs or 5.4%. Statewide, private service-providing industries are up 179,000, or 2.1%, and goods producing industries are up 77,300 jobs, or 4.4%.

We also now have August 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 September 27. In July, Austin had the second lowest rate of unemployment among the 50 largest metros.

Unemployment numbers for August show Austin’s performance relative to the state and other major Texas metros being sustained. In August, Austin is at 3.4%, while the other major metros range from 3.7% in San Antonio to 5.2% in Houston. Dallas and Fort Worth are at 3.9%. Austin’s rate one year ago was 3.4%. The rates in Texas’ other major metros are each below the rates seen a year ago. The statewide not-seasonally-adjusted rate is now 4.5%, down from 4.9% in August of last year. The national unemployment rate is 4.5%, improved from 5.0% in August 2016.

Within the Austin MSA, Travis County has the lowest unemployment rate in August, at 3.2%, while Caldwell County has the highest at 4.2%. The rate is 3.4% in Hays County, 3.5% in Williamson County, and 4.1% in Bastrop County.

On a seasonally adjusted basis, Austin’s August unemployment rate is 3.0%, unchanged from July. The statewide rate is 4.2% improved from 4.3% in July. Nationally, the seasonally adjusted unemployment rate is 4.4% in August, up from 4.3% in July.

Among Texas’ major metros, Dallas has the next lowest seasonally adjusted rate at 3.7%, while San Antonio, Fort Worth, and Houston are at 4.1%, 4.7%, and 5.0% respectively. August rates are unchanged from July in Austin and San Antonio, but up in Dallas, Fort Worth, and Houston. 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.)

While Austin’s unemployment rate is unchanged from one year ago, the number unemployed is down slightly. In August 2016, Austin’s number of unemployed was 38,241. Over the last 12 months, the unemployed have decreased by 480, or 1.3%, to 37,761.

The Austin metro’s civilian labor force (employed plus unemployed) has increased by 1.4% or 15,661 persons from one year ago, while persons employed increased by 1.5% or 16,141. Texas has also seen greater growth in employed (1.3%) than labor force (0.8%), and the number unemployed decreased by 51,459 or 7.8%. Nationally, August civilian labor force is up by 0.7%, while employed is above the level of a year ago by 1.2%, and 709,000 fewer people (8.9%) are unemployed.

The Texas Workforce Commission September estimates on October 20.

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FOOTNOTE:

[1] Current job growth rates appear to have fallen well below Austin’s long term average.  It may be worth noting that monthly estimates are sample survey-based and preliminary. The BLS does an annual benchmark revision of these estimates in March of each year. In 2016, Austin’s year-over-year job growth averaged 3.9% from January through September, then fell below 3.0% in each of the last months of the year, ending at 1.9% in December (bringing Austin’s major metro’s performance ranking to 25th). When the revisions arrived in March of 2017, Austin’s monthly estimates for 2016 were adjusted upwards. While growth did slow between January and December, growth for the 12 months ending in December 2016 was revised from 1.9% to 3.3%. The Federal Reserve Bank of Dallas produces an “early benchmark” nonfarm jobs series (employing the Quarterly Census of Employment and Wages that also informs the annual BLS benchmark revisions). The Dallas Fed noted in their September 7 issue of Austin Economic Indicators that the first quarter of 2017 shows that jobs in Austin were added at a faster rate than initially estimated.

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Beverly Kerr

Vice President of Research, Beverly Kerr, joined the Chamber’s Economic Development Department in 2004, following 10 years in a similar role with the Kansas City Area Development Council. Beverly earned an M.A. in economics at the University of Missouri-Kansas City.