Texas added 33,600 jobs in November, the second-smallest monthly gain in over a year, as the pace of job growth began to slow in the Lone Star State.
Texas’ seasonally adjusted unemployment rate remained at 4% last month, an indication that the supply of workers is still tight.
But evidence of a slowdown is mounting after Friday’s release of new and revised job numbers. Texas’ construction industry lost 3,900 jobs last month as the impact spread from the Federal Reserve’s higher interest rates and the subsequent pullback in the housing industry.
Initially, construction in Texas was reported to have gained 900 jobs in October, but that number was revised down to a loss of 2,600 positions. Statewide, construction has lost employment for four straight months and for five of the past six.
Building permits issued for single-family homes in Texas have been falling since summer, and were 27% lower in October compared with a year earlier.
“Builders have been working off their backlogs, and as their housing units are completed, some people are starting to lose their jobs,” said Adam Perdue, an economist with the Texas Real Estate Research Center at Texas A&M University. “We know that higher interest rates have hit the real estate industry particularly hard.”
Texas’ November job gains were far lower than the 58,800 jobs added in October, an estimate that was revised upward, according to data from the U.S. Bureau of Labor Statistics.
November’s increase was still well ahead of average monthly gains in 2018-19, before the pandemic hit. But recent impressive numbers may not hold up after estimates are revised in coming months.
“A lot of this job growth is going to be revised down; I think it’s been overstated,” said Pia Orrenius, senior economist at the Federal Reserve Bank of Dallas.
A different set of data – from a quarterly census – led to sharp downward revisions for the second quarter of 2022. Both national and state job growth numbers came in much lower than earlier monthly estimates, Orrenius said, and revised results for all of 2022 are likely to be much lower than they appear today.
Texas’ job growth is usually about twice as fast as the nation’s, and Texas has been maintaining its usual edge. For the 12 months ended in November, Texas grew jobs by 5.1%, seasonally adjusted, compared with 3.3% growth for the U.S., the BLS reported.
Orrenius expects Texas’ full-year job growth will be closer to 3% after revisions, and national employment will fall in a similar fashion.
Texas’ year-over-year job growth was the highest of any state, and that won’t change, she said, because numbers will be revised downward for most others, too.
“We’re still going to be the fastest-growing state,” Orrenius said. “What’s going to change is the rate of growth after we do the benchmark revisions.”
The upshot on the labor market: “We’ve been slowing faster than we thought,” she said.
In addition to job losses in construction, government lost 1,000 positions last month; other services lost 300; and the giant trade, transportation and utilities segment lost 700.
Other sectors continued to hire. Leisure and hospitality, one of the hardest-hit industries during the pandemic, added 20,200 positions, according to the Texas Workforce Commission. It had over 1.5 million workers in November, 112,000 more than its pre-pandemic level.
After leisure and hospitality, the big gainers were education and health services, up 5,400; mining and logging, which includes the oil and gas industry, up 3,800; and information, up 3,700.
For the past 12 months, mining and logging has gained nearly 23%, and information and leisure and hospitality were both up about 12%.
Mining and logging was the state’s fastest-growing sector on both a month-over-month and year-over-year basis, Beacon Economics research manager Taner Osman wrote in an investor note.
He pointed to the state’s strength in growing its labor force: The number of people working or looking for work in Texas increased marginally last month while declining in the U.S. for the third consecutive month.
Texas’ labor force has grown 4.6% since February 2020, he said, while the U.S. labor force is smaller than its pre-pandemic peak.
“The most recent figures reinforce that Texas’ strong job performance since the pandemic is rooted in labor force expansion,” Osman wrote. “While the national economy continues to struggle to add workers, Texas continues to be a beacon for workers.”
Unemployment rates remained low in much of the state. Among Texas metros, Austin, Amarillo and Midland recorded the lowest rates in November: 2.8%, not seasonally adjusted.
Dallas-Plano-Irving had a comparable rate of 3.2% and Fort Worth-Arlington’s was 3.4%.
Among metros with the highest unemployment, not seasonally adjusted: McAllen’s rate was 6.4% in November, and Beaumont’s was 6%, the Texas Workforce Commission said.
