The latest jobs report for Texas is replete with good news. November data shows strength across the economy and a new record for total state employment. In less than two years, Texas has completely overcome the devastating loss of about 1.5 million jobs that occurred in early 2020.
For November, Texas added 75,100 jobs, the eighteenth gain in the last 19 months, and the unemployment rate has dropped to 5.2%. There are now almost 13.0 million nonagricultural jobs in the state. Topping pre-pandemic employment levels this quickly is quite impressive.
One noteworthy aspect of the increase is that it represents nearly 36% of the national gain for the month (210,000 net new jobs). Other significant increases occurred in Florida (up 51,100) and California (45,700).
It is also notable that every major industry group expanded during the month. In the past, we’ve seen periods where gains in some segments of the economy were offset by drops in others. The COVID-19 uncertainty and measures required to slow the spread caused extreme volatility in sectors such as travel, retail, and energy. There were times when the state added jobs in retail, while core groups such as manufacturing or construction retrenched. In November, expansion emerged across the board.
Additionally, this very positive report comes just as the energy sector is beginning to ramp up. Employment in mining and logging (which is virtually all oil- and gas-related in Texas) was up 3,700 for the month. When you consider all of the linkages across the state, energy accounts for 13-14% of business activity in normal times. As recovery continues with additional rigs added every week (275 as of December 17), the positive patterns in the industry should lead to additional gains across a broad spectrum of businesses and communities.
There are still risks to reckon with, both short-term and long-term. A major surge in serious COVID-19 cases could certainly slow progress (a particular vulnerability as the spread of the omicron variant accelerates), and the lingering supply chain issues will dampen growth in specific industries at times. Long-term Texas challenges include ensuring an adequate workforce for the future through enhancing educational quality and access, providing adequate infrastructure, and assuring inclusiveness.
On balance, however, the state is well positioned to be among the stellar performers. The Texas economy is diverse, with a strong and varied base of production categories as well as ongoing emergence in advanced manufacturing and other technology sectors. The Lone Star State also has a favorable cost structure and premier economic development programs.
There’s indeed a lot to like in the most recent jobs report. As we enter the final weeks of the year, the Texas economy is hitting on all cylinders. Stay safe!
