Texas’ streak of consecutive months of job gains is at 27 and counting.
The state’s employers added 51,000 new positions in May — the biggest gain by any state — according to data released Friday by the Texas Workforce Commission and the U.S. Bureau of Labor Statistics.
Texas also outperformed every state in jobs added over the year, with 4% annual growth from May 2022 to May 2023, according to the TWC. Texas added 529,800 jobs in that 12-month period. The growth rate for the nation was 2.7%.
The stepped-up hiring comes as the Federal Reserve took a pause this week in its efforts to cool inflation with a series of rapid interest rate increases. Many industries, such as construction, restaurants and health care, are still adding jobs to keep up with consumer demand and restore their workforces to prepandemic levels.
Texas’ unemployment rate took a small jump in May to 4.1%, ticking up one-tenth of a percentage point as the state’s labor force expanded to a record 15,009,300. The nation’s jobless rate rose by three-tenths of a point to 3.7% in May, according to Beacon Economics’ latest analysis.
Gov. Greg Abbott attributed Texas’ job growth to the state’s business environment.
“Texas’ robust economy stands apart as a model for the nation,” he said in a statement. “With the Texas labor force now surpassing 15 million people and larger than the population in 46 states, we truly are building an even stronger Texas of tomorrow.”
Pia Orrenius, vice president and labor economist at the Federal Reserve Bank of Dallas, said she also is optimistic about Texas’ ability to weather any economic cooldown.
“We are a little bit more resilient than the nation on average, just because we do grow faster,” Orrenius said. “We expect job growth to slow, and the unemployment rate should continue to rise, but we’re not predicting job losses.”
Though the rest of the country saw a 2.7% increase in new nonfarm jobs during May, Texas increased nonfarm jobs by 4%. The state accounted for 15% of the nation’s new nonfarm jobs last month.
Driving the state’s job growth in May were 21,500 new professional and business services jobs, 11,800 new trade, transportation and utilities positions and 7,000 new jobs in mining and logging, the category that includes Texas’ potent oil and gas industry.
Mining and logging gains were up a strong 3.3% over April.
The Texas Independent Producers and Royalty Owners Association, one of the trade groups representing the industry, said oil and gas extraction and services companies have created 22,700 jobs in the last year.
The association said it expects to see additional gains this summer, citing data from the U.S. Energy Information Administration that projects U.S. crude oil production in July will rise to 9.375 million barrels per day — up 8,000 a day from June’s forecast. A key contributor will be the Permian Basin, which encompasses a huge swath of West Texas and New Mexico.
TWC chairman Bryan Daniel said in a statement that Texas’ remaining 687,000 job openings “represent even greater opportunity.” That’s down considerably from the 1 million job openings that closed out 2022.
Mallory Vachon, senior economist at LaborIQ, said Texas’ vast marketplace for employees has played a big role in the state’s continued growth.
“There’s a good amount of tech, construction, real estate, a bit of oil and gas. So we just have a giant population here with a diversified economy in terms of industries, which tend to kind of insulate us” in more volatile business cycles, Vachon said.
Orrenius pointed to a graphical curve that represents the relationship between job openings and the state’s unemployment rate.
“The Beveridge curve ... is actually steeper in Texas than it is in the nation, which means that the probability of a soft landing is higher here,” she said.
