Although Wall Street may be worried and interest rates may be rising, the labor market is still expanding, both in Texas and nationally. On Friday, the Texas Workforce Commission reported that the state added 48,600 nonfarm jobs in January, the most since October 2022 and the 16th straight month of record employment.
Seasonally adjusted unemployment in Texas increased a tad to 3.9%. Since MAarch 2022, the state’s unemployment rate has stayed around 4%, demonstrating the continued tightness of the job market.
The U.S. Department Of Labor Statistics
That is a hurdle for businesses wanting to expand and hire new talent. Yet, it’s encouraging for workers who wish to increase their chances. And the rate at which jobs are being created continues to astound economists.
“For the last 11 months, I’ve been expecting Dallas-Fort Worth, Austin and everywhere in Texas to slow down, and I’ve been wrong,” said Adam Perdue, an economist with the Texas Real Estate Research Center at Texas A&M University. “The idea that we’re sustaining such high rates of growth is kind of hard to wrap my head around.”
Maybe the growth “is just going to continue to continue,” he suggested. The national employment data for February showed a tremendous gain, and the Texas job numbers for January were also released on the same day.
According to the U.S. Department of Labor Statistics, the country added 311,000 nonfarm employment in February, significantly more than the gains in February 2020 before the pandemic struck but less than the 504,000 jobs added in January.
According to the statistics, the national unemployment rate had not changed since early 2022, when it dipped to 3.6%. The leisure and hospitality industry, and professional and business services, were the main drivers of job growth in Texas in January. For the month, each reported making over 8,000 net hires.
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Five thousand nine hundred jobs were added in both manufacturing and construction. The most considerable one-month percentage rise was the net addition of 2,500 jobs in the Texas oil field, which continues to grow. The labor commission said that “every major industry saw positive over-the-month job growth” for the second consecutive month.
Even the government sector, which has experienced the poorest job growth in Texas over the last 12 months, saw a job growth of 5.700 in January.
“They needed to catch up because they weren’t able to hire for a long period of time,” said Pia Orrenius, a senior economist at the Federal Reserve Bank of Dallas. “But the big surprise here is the goods-producing sector.”
The oil and gas industry has often been recruiting throughout the past year, and this trend was anticipated to continue. But, because the construction industry is so susceptible to interest rates, which the Federal Reserve has been raising to control inflation, the sector has been laying off people.
Texas’s construction jobs fell from August through November before increasing by 700 in December. After that, construction added a net of 5,900 new employees in January. For example, the cost of lumber has decreased, according to Orrenius. Some prices are much lower than previously, yet there is still demand.
Construction Index tweeted that the Pace of the Irish constitution is accelerating. You can see below:
Pace of Irish construction growth accelerates https://t.co/cNaRk5d8Iu pic.twitter.com/1ooFRuw5bD
— Construction Index (@TCIndex) June 12, 2018
As it has for most of the current recovery, Texas’ rate of employment gain in January was faster than the national rate. The number of jobs added nationwide in February was higher than anticipated, and key stock market indices declined on Friday, continuing a previous pattern.
Many investors see the employment market’s resiliency as a warning that the Federal Reserve may continue raising interest rates to contain inflation. And that heightens the recession’s threat.
“The labor market cools from blistering to just plain hot,” Nancy Vanden Houten, lead U.S. economist for Oxford Economics, wrote in a report Friday. “The pace of job growth is still too rapid for the Fed’s liking and leaves the Fed on track to raise rates at each of the next three meetings.”
There is “a risk that more rate hikes will occur in the second half of the year,” she continued.
The Dallas Fed predicted last month that Texas would create 193,000 jobs in 2023, resulting in a net rise of 1.4%. The Dallas Fed significantly increased its estimate on Friday in response to Friday’s strong jobs report and some prior positive revisions. Orrenius stated, “Our expectation has doubled to 2.8% growth this year.
