Insights

• Austin added 42,200 jobs, growth of 3.3%, in the 12 months ending in September, making it the 7^th best performing among the top 50 metros.
• The fastest job growth over the last 12 months occurred in Austin’s leisure and hospitality (7.0%) and construction and natural resources (6.6%) industries.
• Austin made up all of 2020’s pandemic-related job losses by April 2021 and the metro ranks first for job growth since February 2020.
• Austin’s seasonally adjusted unemployment rate decreased to 3.4% in September from 3.6% in August.

Non-farm payroll jobs—growth strengthens

Austin’s September nonfarm payroll jobs total is up by 42,200, or 3.3%, over the last 12 months according to Friday’s releases of monthly labor market data by the Texas Workforce Commission and the U.S. Bureau of Labor Statistics. On a seasonally adjusted basis, August to September job growth was 9,000 jobs or 0.7% in Austin. Statewide, jobs grew 0.4%, and nationally, seasonally adjusted jobs increased 0.2%.

Combining job losses for March and April 2020, Austin lost 137,200 jobs, or 12.0%, due to the impact of COVID-19. By April 2021, Austin surpassed the jobs total it had in the last pre-pandemic month.[1] Since March 2022, Austin has been at or above the level of employment that might have been projected had there been no pandemic. In 2018 and 2019, the average monthly percent change in nonfarm payroll jobs was 0.33%. The graph below illustrates what Austin’s job trend might have looked like if the pandemic hadn’t happened and Austin sustained that average pre-pandemic growth rate.

As of September 2023, 46 of the top 50 metropolitan areas have regained their pre-pandemic level of jobs. Comparing metros based on where they stand relative to pre-pandemic February 2020, Austin, up 16.4%, is the best performing major metro. Dallas (13.2%) and Fort Worth (9.9%) are also in the top 10. San Antonio (7.8%) and Houston (5.6%) rank 12^th and 18^th. Detroit ranks 50^th with September 2023 jobs 0.8% below February 2020.

Austin’s year-over-year increase of 3.3%, or 42,200 jobs, makes it the seventh best performing among the 50 largest metro areas. Faster growing Dallas (4.5%) and Fort Worth (3.9%) rank first and third, while San Antonio (3.1%) and Houston (2.9%) rank 13^th and 16^th respectively.

For the year ending in September, private sector job growth in the Austin MSA is 3.3%, or 36,800 jobs, with gains across nine of the 11 major private industry sectors. Customarily, slow government job growth drives overall job growth lower than private sector job growth in Austin, but that is not the case in September. Austin’s sizable government sector (14% of jobs) is up by an uncommonly strong 2.9% (5,400 jobs), and this month the year-over-year job growth rate is also 3.3%.

Texas saw net private sector job growth of 3.2% with each of the private industry groups adding jobs over the last 12 months. Total job growth was 3.1% as the government sector grew at a 2.8% rate. For the nation, private sector job growth was 1.9% for the 12 months ending in September with all but two private industries adding jobs. Overall job growth was higher at 2.1%, due to robust 2.8% government sector growth.

Jobs in September are up by 11,500 jobs or 0.9% from August in the not-seasonally-adjusted series for Austin. However, the seasonally adjusted series shows a slighter gain of 9,000 jobs or 0.7%. Seasonally adjusted jobs are up by 0.8% in Dallas, 0.5% in Fort Worth and San Antonio, and 0.4% in Houston. Statewide, seasonally adjusted jobs are up 61,400 or 0.4%. Nationally, seasonally adjusted jobs are up from August by 336,000 or 0.2%.

In Austin, nine of the 11 major private industry sectors added jobs over the last 12 months, most notably leisure and hospitality (7.0% or 9,800), construction and natural resources (6.6% or 5,300 jobs), and other services (5.7% or 2,800). Professional and business services tied leisure and hospitality for adding the most jobs, 9,800, but at a more moderate 3.5% rate of growth. Wholesale trade (-2.1% or -1,200 jobs) and information (-1.3% or -700) saw negative year-over-year growth.

Each major private industry sector in Austin has now surpassed pre-pandemic employment levels and, in aggregate, private industry is up 20.0%. Leisure and hospitality shed 62,100 jobs in March and April of 2020 (45% of all jobs lost). The industry finally regained those lost jobs in April 2022. Employment attained a new peak of 151,700 jobs in July 2023, but is slightly down from that in September. The industry’s September jobs total of 149,700 represents 11.2% of all jobs which is slightly below its 12.0% pre-pandemic share. Other services (51,900 jobs in September) regained its pre-pandemic level of employment in May 2022,[2] one month after leisure and hospitality. Transportation, warehousing and utilities is the lone industry in Austin that did not lose jobs with the onset of the pandemic and it has seen the fastest growth, 42.9%, since February 2020. The large professional and business services industry accounts for 36.8% of all private sector jobs added in Austin since February 2020.

Additional graphs: New/lost jobs by industry for Feb. 2020-Sep. 2023 and Aug. 2023-Sep. 2023 and the trend since 2000 for six large industries and six small industries.

Statewide, over the last 12 months, all private industries added jobs. The industries with the most significant growth are education and health services (4.8%), other services (4.2%), and construction and natural resources (4.1%). All private industries also have more jobs now than they did in February 2020. Private industry jobs are up 9.7%. The best performing industry since the pandemic is transportation, warehousing and utilities, which is up by 19.6% from February 2020. Construction and natural resources, the last industry to recover, now has 3.1% more jobs than it did pre-pandemic.

Nationally, all private industries, but two, added jobs over the 12 months ending in September, led by education and health services and leisure and hospitality, both growing by 4.1%. Each industry, except other services (below pre-pandemic by 0.3%), has now regained pre-pandemic levels of employment and in total, private sector jobs are up 4.8%. Leisure and hospitality finally recovered the jobs lost during the pandemic in April 2023 and now has 530,000 jobs (3.3%) than the industry did in February 2020.

Over the last 12 months, the net gain for private service-providing industries in Austin is 29,000 jobs, or 3.0%. Employment in goods-producing industries is up by 7,800 jobs or 5.2%. Statewide, private service-providing industries are up 289,700 or 3.0%, and goods-producing industries are up 76,100 or 3.9%.

Labor force, employment & unemployment

We also now have September labor force, employment, and unemployment numbers for Texas and local areas in Texas. The same data for all U.S. metros will not be released by the U.S. Bureau of Labor Statistics until November 1. In August, Austin had the 30^th lowest rate of unemployment among the 50 largest metros. Unemployment numbers for September show Austin’s performance relative to the state and other major Texas metros being sustained.

In September, Austin’s not-seasonally-adjusted unemployment rate is 3.6%, which is an increase of 0.8 percentage points above where it was one year ago (2.8%). Rates in the other major Texas metros range from 3.8% in San Antonio and Fort Worth to 4.4% in Houston and their current rates are 0.3 to 0.5 percentage points above the rates one year ago. The statewide rate is now 4.1%, up from 3.7% in September of last year. The national unemployment rate is 3.6%, up from 3.3% a year ago.

Before the pandemic in 2019, the unemployment rate averaged 2.7% in Austin, 3.5% in Texas, and 3.7% nationally.

September unemployment rates are 3.5% in Bastrop, Caldwell, and Hays Counties, 3.6% in Travis county, and 3.7% in Williamson County.

On a seasonally adjusted basis, Austin’s September unemployment rate is 3.4%, down from 3.6% in August. The statewide rate is 4.1%, unchanged from August. The national rate is 3.8%, unchanged from August.

Among Texas’ other major metros, Fort Worth and San Antonio are at 3.7%, Dallas is at 3.8%, and Houston is at 4.3%. Seasonally adjusted unemployment rates for Texas metros are produced by the Federal Reserve Bank of Dallas. (The Texas Workforce Commission also produces seasonally adjusted rates for Texas metros, but publication lags the Dallas Fed’s estimates.)

In February 2020, before pandemic impacts, the number unemployed in Austin was 32,881. The number climbed to 133,963 in April and also exceeded 100,000 in May and June. In September 2023, unemployed stands at 52,275. That is 33% higher than it was one year ago and it is also 33% above what the number of unemployed might be if the unemployment rate matched Austin’s pre-pandemic 2.7% average.

The Austin metro’s civilian labor force (employed plus unemployed) fell by 91,603 persons or 7.2% in March and April of 2020, while persons employed decreased by 192,685 or 15.6%. Labor force now stands at 15.3% above what it was in February 2020 and employed is estimated at 14.2% above.

Additional graphs – Labor force & employment: Texas and United States

Texas’ labor force is 7.2% above pre-pandemic February 2020, while employment is 6.5% above. Nationally, civilian labor force and employment surpassed February 2020 for the first time in March 2022. In September 2023, the national labor force is 2.1% above February 2020 and employment is up by 2.3%.

Over the last 12 months, Austin’s labor force increased by 4.0% and employed by 3.1%. Texas increased labor force by 3.4% and employed by 2.9%. Nationally, labor force growth was 2.0% and employment increased by 1.7%.

Conclusion

In Austin, the job market continues to shine, with impressive growth and a notable decline in unemployment. The Austin metro ranks first for job growth since February 2020, successfully regaining all of the pandemic-related job losses by April 2021. In the 12 months ending in September, Austin added 42,200 jobs, representing a growth rate of 3.3%, securing its position as the seventh best-performing among the top 50 metros. Notably, the city’s leisure and hospitality industry saw the fastest job growth at 7.0%, closely followed by the construction and natural resources sector at 6.6%. With the seasonally adjusted unemployment rate dropping to 3.4% in September from 3.6% in August.

The Texas Workforce Commission and the U.S. Bureau of Labor Statistics will release October estimates on November 17.

Opportunity Austin’s Economic Indicators page provides up-to-date historical spreadsheet versions of Austin, Texas and U.S. data for both the Current Employment Statistics (CES) and Local Area Unemployment Statistics (LAUS) data addressed above. The Central Texas Economy in Perspective page provides an archive of past articles on the labor market and many other topics.

Footnotes:

1. Fort Worth and Nashville also made up pandemic-related job losses by April 2021.↩
2. Other services is largely comprised of repair and maintenance; personal and laundry services; and religious, grantmaking, civic, professional, and similar organizations.↩

Full Article here