Texas unemployment falls below 4% for first time since COVID-19 shutdowns

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Texas continued a 14-month streak of document employment in December, in response to a Friday report from the Texas Workforce Commission. And the state’s unemployment charge dropped to three.9%, the first time it fell below 4% since the forced business closures on the onset of the coronavirus pandemic.

Texas employers added 29,500 nonfarm jobs in December, in response to the TWC. Positions in training and well being care accounted for over 40% of that determine with 12,700 positions, main final month’s job progress. Financial companies and manufacturing additionally added 6,300 and 5,500 jobs respectively.

In complete, there are greater than 13.7 million nonfarm jobs within the state.

Texas additionally noticed robust job progress for a lot of 2022. According to a report from the Bureau of Labor Statistics, from November 2021 to November 2022, Texas noticed the nation’s second-highest improve in complete nonfarm payroll employment with 657,600 jobs — a 5.1% bump. California led the nation with 675,000 added positions.

“Texas leads the nation in offering businesses the freedom to flourish and grow,” Gov. Greg Abbott mentioned in a press launch. “We live in a state of infinite possibilities, and in the legislative session ahead, we will continue working together to keep Texas the land of opportunity.”

But economists on the Federal Reserve Bank of Dallas have noted since September that Texas is seeing an financial slowdown, most lately citing the softening progress in jobs, manufacturing output and inflation within the state. For comparability, the state added 40,000 jobs in September — nearly 1.4 instances greater than December’s determine.

“It’s still good job growth, and it’s more in line with our ability to fill these jobs,” mentioned Pia Orrenius, a senior economist on the Dallas Fed.

For 2023, Orrenius expects Texas to see “significantly slower” job progress, however it will possible nonetheless be quicker than the remainder of the nation. At the identical time, she mentioned the Dallas Fed has not but forecast a recession in Texas for this yr — although she acknowledged that the financial downturn may nonetheless come within the second half of the yr or in early 2024.

Texas Comptroller Glenn Hegar has beforehand informed The Texas Tribune that he’s anticipating a “relatively shallow and short” recession for the state in 2023, however he cautioned that the Federal Reserve’s effort to mood inflation nationally may heighten the recession. Inflation in Texas is coming down month over month — however the determine remains to be “a really high number” yr over yr, in response to Orrenius.

“A soft landing is what we’re seeing for Texas in 2023,” she mentioned.