January 22, 2021
Beacon Employment Report | Texas
Presented by Beacon Economics
Copyright © Beacon Economics LLC
TEXAS JOB RECOVERY CONTINUED IN DECEMBER BUT COVID RESURGENCE CREATING HEADWINDS IN NEAR TERM FUTURE
Texas Labor Market Performing Better Than Nation As A Whole
Texas’ labor market continued to recover from April’s lows in December (latest numbers available). Total nonfarm employment in the state expanded by 64,200 positions over the month, which, like November, represents a cooling of the labor market recovery. The slowdown has occurred as the surge in COVID-19 cases and mandated business restrictions have created headwinds for the state’s labor market.
Lost Jobs Recovered
December marked the eighth straight month of job gains in Texas following the depths of the labor market downturn in April. Since April, only 64% of the jobs lost have been recovered in the state and, as of December, there were 502,600 fewer people employed in the Texas economy than in February 2020.
Jobs Lost In 2020
However, the Texas labor market has been more resilient than the nation as a whole. In December, the U.S. labor market recorded its first month-over-month decline in employment since April. While total nonfarm employment in Texas contracted 3.9% from February to December 2020, nationally, total nonfarm employment contracted 6.5% over this period. Texas ended the year with 431,000 fewer jobs than when the year started, a contraction of 3.3%. This trend will almost certainly reverse in 2021.
“This is actually an impressive performance by the state’s economy, given that jobs were lost nationally in December for the first time since the downturn began,” said Taner Osman, Research Manager at Beacon Economics. “Texas is well positioned to recover all the jobs lost to the COVID recession within 2021.”
Texas’ employment gains in December were coupled with a decline in the unemployment rate, which fell to 7.2%, down from 8.1% the previous month. This leaves the state’s unemployment rate elevated relative to the national economy (6.7% in December) but there is a reason for that. The decline in the state’s unemployment rate occurred despite Texas’ expanding labor force, which increased 2,500 in December. In fact, Texas’ labor force has nearly fully recovered since February, standing at 99.8% of February 2020 levels. This explains why Texas’ unemployment rate is elevated compared to the national figure, where the labor force has contracted to a much greater extent. Texas’ unemployment rate in December is still a far cry from the start of 2020, when the unemployment rate stood at 3.5%, more than doubling over the year.
The Beacon Employment Report | Texas is a unique analysis of Texas’ employment numbers and trends. Each month, we link our own econometric predictions to data released by the U.S. Bureau of Labor Statistics and the Labor Market Information Division of the Texas Workforce Commission to identify important changes in employment across industries and regions. The Beacon Employment Report is also one of the few analyses that uses seasonally adjusted numbers, which are critical to revealing accurate trends and insights within data. The analysis is a sample of the kind of research available from Beacon Economics.
The contents of this report are based on information derived from carefully selected sources Beacon Economics believe are reasonable. We do not guarantee its accuracy or completeness and nothing presented here shall be construed to be a representation of such a guarantee.