Texas adds nearly 78,000 jobs in February as jobless rate drops
Texas added 77,800 nonfarm payrolls in February, and the state’s unemployment rate fell again as COVID-19 cases fell and the economic expansion continued to gain momentum.
Texas’ economy was given a big boost by rising oil and gas prices as the fallout from Russia’s invasion of Ukraine spread.
Texas added 4,500 mining and logging jobs, a 2.3% gain in February. According to Texas Labor Commission.
Last month saw broad-based strength in the labor market, with notable growth in both the goods-producing and services-producing sectors. Texas also added 40,000 people to the civilian workforce, which is important for filling thousands of open jobs in the state. And Texas’ unemployment rate was 4.7%, down 0.1 percentage points from January.
“It looks like the job market in Texas is running at full speed,” said Pia Orrenius, senior economist at the Federal Reserve Bank of Dallas. “We have healthy job growth and good labor force growth, and the unemployment rate is down. What’s not to love?
February’s monthly job gains were the highest since October and November, before the omicron variant swept through the state and sent hospitalizations soaring. January job gains were also revised up from 29,000 to over 50,000, suggesting that the Texas economy has weathered the omicron wave better than expected.
“The economy appears to be becoming more resilient to COVID,” Orrenius said.
Texas surpassed its pre-pandemic employment peak in November, surpassing 13 million non-farm employees, and it recorded nearly 13.2 million workers last month. It is now in expansion mode with jobs growing 0.6% in February, faster than US job growth for the month.
The unemployment rate in the United States, at 3.8% in February, remains below the unemployment rate in Texas and has been lower for many months. Texas’ higher unemployment rate may actually be a boon for a state that is creating jobs at a rapid pace, especially with rising wages.
“There’s a little slack there, and maybe we can get those workers back into the workforce,” Orrenius said.
Texas still had 675,000 unemployed workers in February, nearly 200,000 more than before the pandemic. And the main goods-producing sectors – mining and logging, construction and manufacturing – all remain below pre-pandemic employment levels.
The hard-hit leisure and hospitality industry also has fewer workers than before the pandemic.
But all these sectors are coming together. Leisure and hospitality added 17,400 jobs last month. Manufacturing added 6,300 jobs and construction 5,900.
On the service side, over 18,000 jobs were added in trade, transport and utilities, a giant sector with over 2.6 million employees. Professional and business services gained 16,800 jobs and financial activities added 10,100 jobs.
The segment that includes health care added 7,200 positions.
The rise in mining and logging jobs, up 2.3%, was among the industry’s largest gains in nearly a decade, said Bruce Bullockdirector of the Maguire Energy Institute at Southern Methodist University.
“It’s a very good sign for the oil and gas sector,” Bullock said. “The biggest challenge has been finding trained people – and getting them back to work.”
The Russian invasion, followed by sanctions on its oil and gas production, has rattled energy markets. Higher gas, heat and electricity prices are a burden for many consumers, but they’re providing a tailwind for the Texas economy.
On Friday, the Dallas Fed raised its growth outlook for Texas by about 1 percentage point for the first semester. Citing recent increases in energy prices, he now predicts Texas will add 440,200 jobs in 2022.
The war and its fallout remain a major economic threat to the state, the nation, and the world. They also added more problems to supply chains, which were already slowing global production and driving up prices.
If there were fewer constraints on the supply chain, Bullock said, “the number of new jobs would be significantly higher.”
The public sector was among the few to lose workers last month with a drop of 6,900 jobs. One explanation is that private employers are winning the bidding wars for talent.
“In these tight labor markets, the government is really at a disadvantage because they’re not as flexible on wages,” Orrenius said. “They can’t raise wages as quickly as the private sector.”
Among Texas metros, Austin had the lowest unemployment rate in February, at 3.3%, not seasonally adjusted. The rate in Dallas-Plano-Irving was 4% and 4.2% in Fort Worth-Arlington, according to the labor commission.
McAllen had an unemployment rate of 8.4% in February and Beaumont’s rate was 8%.