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Houston's unemployment rate dropped to its lowest level in nearly two decades, as Houston's economy continued to create jobs last month as a result of a strong rebound in manufacturing employment.
The region's unemployment rate slipped to 3.7% in March from 4.5% in March 2018, the Texas Workforce Commission announced Friday. It was the lowest unemployment rate since the end of 2000.
Houston employers created nearly 10,000 jobs during the month, the largest increase since October. The region has created nearly 70,000 jobs compared to the previous year.
Employment in the local manufacturing sector increased by 16,400 jobs compared to March 2018, an increase of 7%. This is another sign that manufacturing activity may pick up after several months of slowdown, in part because of trade disputes that have eroded foreign steel tariffs, increased costs for many manufacturers and provoked retaliatory tariffs. on US products, said Patrick Jankowski, senior economist and senior vice president for research at the Greater Houston Partnership.
Supply chain officials said in a survey earlier this month that manufacturing activity has increased. But other indicators, such as the number of rigs, down since the beginning of 2019, could still cause a slowdown in the course of the year in the sector, which is closely related to the oil and gas industry, said Jankowski.
"What's good to see is with the manufacturing sector, it's blue-collar jobs, so it's growth right in the middle of the economy," he said.
Two in a row
The oil and gas extraction industry recovered slightly in March, creating about 200 jobs as of March 2018. This was the second gain in employment consecutive one year to the next for the sector, after nearly five years of losses. Jankowski said that even the slight increase in employment could indicate that the sector is starting to recover after a collapse of oil that cost Houston thousands of jobs in the energy sector between 2015 and 2017.
"It seems that we are finally starting to see the collection of oil and gas," said Jankowski. "I was so happy to see that. I was afraid that jobs never come back. "
It is unlikely, however, that employment in the energy sector in Houston will return to the levels of the last oil boom, which peaked in 2014 when prices exceeded $ 100 per barrel. Since the recession, the industry has focused on increasing productivity and reducing costs. She turned to automation and other technologies to produce more oil with fewer workers.
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The education and health services sector created 10,500 jobs over the previous year, as a growing and aging population increases the demand for medical services. Harris County has recently been ranked third among the most populous counties in the country, according to population estimates. The metropolitan area added 1 million people between 2010 and 2018.
Employment gains in March were widespread, with most major sectors creating jobs during the year. The retail trade was one of the only ones to have lost jobs. In March 2019, almost 6,000 jobs were lost. The retail sector has struggled in Houston and across the country. and traditional businesses replace jobs with technologies such as self checkout.
National expansion
The local economy was spurred by the recovery in the energy sector and the strong national expansion that pushed the US unemployment rate to 3.8%, its lowest level in 50 years. With record unemployment rates across the country, Houston is no longer able to attract workers with the only promise of jobs, said Jankowski.
This will probably force companies to pay more. This would be good news for the workers. According to the US Department of Labor, compensation paid in Houston has been virtually stable for a year, and wages and salaries have been growing more slowly than the country as a whole since September 2017.
"It will be harder to find someone to pack up and move to Houston when they can find a job in their own backyards," Jankowski said. "For businesses to grow, they will have to increase the benefits to attract workers to their businesses."
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Texas, however, continues to attract workers. The state's work force has reached a record high of over 14 million, the Texas Workforce Commission said.
The state economy has been strong enough to absorb new workers without increasing unemployment. Texas employers created nearly 23,000 jobs in March, while the state's unemployment rate remained steady at 3.8%, just above its lowest level of 3.7%.
Texas employers created 22,600 jobs in March, according to seasonally adjusted data.
Cities in West Texas have once again recorded record unemployment rates, with the shale boom in the Permian basin causing a demand for labor. The Midland metropolitan area recorded the lowest unemployment rate of any Texas city (2.1%), followed by the metropolitan region of Odessa, which recorded an unemployment rate of 2.5% .
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