Austin area unemployment rate drops to 3.2% as hiring boom continues

The unemployment rate in the Austin metropolitan area fell to a new pandemic-era low for the fifth consecutive month – hitting 3.2% in November – as local businesses continued their efforts to hire workers in the amidst the region’s strong economy.

It is not known whether growing concerns over the omicron variant of the coronavirus, first detected in Texas earlier this month, will disrupt the trend.

“Right now, I’d say the biggest problem (for businesses) is hiring enough people – not the prospect of omicron slowing down their operations,” said Jason Schenker, president of Austin-based Prestige Economics. “The job market in Austin is very, very tight right now.”

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Austin-area businesses added 11,800 non-farm jobs to their payrolls last month, bringing the total number of people employed in the region to nearly 1.19 million – a new record for the fourth consecutive month and the latest indication that, at least on a macro level, the local economy has fully recovered from the slowdown induced by the pandemic.

Austin Police Officer Carl Cumberbatch chats with Vicky Li at an Austin Police Department career fair at the MT Supermarket in Austin on November 16.  The unemployment rate in the Austin metropolitan area fell to 3.2% in November, according to the Texas Workforce Commission.

The region’s unemployment rate, which was 3.4% in October, has fallen steadily since June after spending much of the previous 12 months in a range of around 5% to 6%, according to figures from the Texas Workforce Commission that have not been adjusted. for seasonal factors.

The unemployment rate remains above its level of 2.5% in November 2019, before the pandemic. But it improved dramatically after hitting 11.8% in April last year, when the shock from the coronavirus first hit the state and country-wide economy and sparked a big number of job cuts.

The omicron variant of the virus has the potential to strike another blow at business activity across the United States, although economists said the lessons gleaned in the early months of the pandemic – as well as the availability of vaccines – will probably limit it.

This is especially true for the Austin area, they said, which has benefited throughout the coronavirus crisis from the diversity of its employer base and its high proportion of professional and high-tech workers.

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“The nature of the Austin economy is that so many of us can work from home” and perform tasks remotely, said Matt Patton, economist at Austin-based Angelou Economics. “What we have seen is that Austin’s economy is very resilient.”

But the omicron variant still poses an economic threat if it escalates into another major health crisis, especially for restaurants, hotels and other businesses in the leisure and hospitality industry that have been hit hard by the initial downturn induced by the pandemic and have not yet fully recovered. .

The Austin metropolitan area, which includes Travis, Williamson, Hays, Bastrop and Caldwell counties, has created more than 20,000 hospitality-related jobs in the past year – but local employment in the sector remains still about 7,000 of the estimated 134,000 workers he had. just before the pandemic.

Employment is well above pre-pandemic levels in a number of other sectors of the local economy. Jobs in professional and business services, which include the high-tech industry, are up by nearly 30,000, to a total of 232,300 in the region, while retail trade – which typically follows the population gains – added nearly 8,000 jobs, for a total of 117,000.

“Restaurants, tourism, travel (and) some service companies – if (the omicron variant) becomes a big deal, it might hurt them,” as people might again be reluctant to mingle with crowds and public places , said Schenker. “But these are not the essentials of the economy in Austin.”

Patton agreed, saying the Austin area is set to continue creating jobs outside of the leisure and hospitality industry despite the ongoing pandemic.

The trend is being driven by large economic development projects underway here – such as Tesla’s electric vehicle plant in southeast Travis County and recently announced plans by Samsung for a chip factory in Travis County. Williamson – as well as what has apparently been a treadmill of new businesses. and residents who have moved to the area in recent years, he said.

The omicron variant “is a reminder that we’re not completely out of the woods,” Patton said. “But what we’ve seen from the start is that people still want to come here.”

Statewide, the unemployment rate for November was 5.2% on a seasonally adjusted basis, according to the Texas Workforce Commission, down from 5.4% in October and 7.2% in November 2020. Unadjusted for seasonal factors , the statewide rate was 4.5% last month.

Statewide hiring last month took the total number of jobs in Texas to a record 12.99 million people, surpassing the previous high of 12.97 million reached in February 2020 just before the start of the pandemic. The state has now created jobs in 18 of the past 19 months.

The Texas Workforce Commission does not immediately adjust its metropolitan area data for seasonal factors. But the Federal Reserve Bank of Dallas released seasonally adjusted figures for the Austin area on Friday that pegged the local unemployment rate last month at 3.5%, down from 3.7% in October and 5.4%. in November of last year.

Overall, the November unemployment rate in the Austin area was the lowest among major metropolitan areas in Texas, according to the Dallas Fed, with the Dallas metropolitan area in second place with a seasonally adjusted rate of 4. , 3%. The McAllen region in South Texas led the state’s major metropolitan areas with 8.6%.

Schenker said the unemployment rate in the Austin area would be considered “incredibly low” even before the pandemic for most places state and nationwide.

“There is a virtuous cycle of job creation going on in Austin right now, and it is accelerating,” he said, referring to the phenomenon in which companies that move to an area trigger an increase. demand for goods and services and therefore more hiring. “There might be some COVID bumps on the road, but Austin has a lot of tailwinds. “

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