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Austin area adds 18,000 jobs in October; jobless rate down to 3.4%

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Austin-area businesses added more than 18,000 workers to payrolls in October, continuing a strong hiring pace that brought the unemployment rate down to 3.4% — a new pandemic-era low for the fourth consecutive month.

The trend is the latest indication that business activity in the region has fully recovered from the downturn caused by the pandemic, at least on an aggregate level, according to economists.

“In terms of the economy, the pandemic is basically over” in the Austin area, said John Hokenius, president of Austin-based economic analysis firm TXP. Job – How much will you get paid for it?

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The local unemployment rate, which came in at 3.5% in September, has fallen steadily since June after spending much of the previous 12 months in a range of about 5% to 6%, according to figures from the haven Texas Workforce Commission. Adjusted for seasonal factors.

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It is still above its rate of 2.6% in October 2019, before the pandemic. But it has remarkably improved after rising to 11.8% in April of last year, when the coronavirus shock hit the statewide economy for the first time and caused massive job cuts.

“As an economist, I have no complaints about the 3.4% unemployment rate,” said Dirk Mater, a professor at the University of Texas. “That’s considered good to great” in most places even before the pandemic.

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Additionally, the workforce in the metro Austin area, which includes Travis, Williamson, Hays, Bastrop and Caldwell counties, has grown significantly over the past two years despite the pandemic, meaning that new and existing local businesses have absorbed thousands of new workers who have flocked to the area.

About 1.17 million non-agricultural workers were employed in the metro area last month, according to the Manpower Commission. This is the highest on record and about 77,000 more than in October last year and 41,000 more than in October 2019.

There is also plenty of evidence that local employers would hire more people if they could. Online “help wanted” jobs have hit record levels in recent months, and several companies in the region have said they are raising wages and offering bonuses in attempts to attract workers.

“Demand (from consumers for goods and services) is definitely there,” Hokenius said. “As everyone knows, it’s hard to get a seat in a restaurant (in the Austin area), hotels are full and (airline) flights are full.”

However, it remains to be seen how quickly the domestic unemployment rate will continue to decline – and when or whether it will reach a level of less than 3% before the pandemic spreads.

That’s because a variety of factors are keeping some potential workers on the sidelines, economists said, including ongoing concerns about the coronavirus, a desire for better-paying jobs than before the pandemic and a mismatch with skills employers need.

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“To forecast Austin six months from now, I think we’ll be close to 3% (unemployment), but not back to 2.6%,” Mater said. “I don’t think this will happen very easily. It would be difficult to get rid of that last percentage.”

The leisure and hospitality sector, which was riddled with travel restrictions and restrictions on crowd sizes when the coronavirus pandemic hit, has had a particularly difficult time regaining all the jobs it lost during the pandemic. In the Austin area, the sector added about 21,000 jobs over the past year, but it’s still less than about 10,000 jobs before the pandemic.

“This is clearly where the epidemic has hit hardest, and it will be the last to come back fully,” Hokkenius said.

He said companies in the sector may have to adapt to permanently higher pay scales to attract all the workers they need.

Regardless, employment in many other industries was booming in the Austin area and more than made up for lost jobs in the leisure and hospitality sector.

The region’s professional and business services sector, which includes high-tech employers, has added about 26,000 jobs since just before the pandemic early last year. The sector that includes retail, which tracks demographic trends, has added nearly 15,000.

Domestic employment in general also accelerated.

Job growth in the Austin metro area reached an annualized rate of 10% in the third quarter, according to the Federal Reserve Bank of Dallas, a significant rise from a total of 4.9% in the first and second quarters. Data from the Dallas Federal Reserve showed that as of July, the region had regained all of its 140,287 jobs lost amid the initial shock of the pandemic on an aggregate basis.

“New employers are moving to Austin faster than workers are coming to Austin,” Mater said. “Jobs are being created faster than the labor force is growing – and that’s a good problem” for the local economy.

A number of major corporate developments have enhanced the business climate in the Austin metro area over the past 12 to 16 months.

Among them, electric car maker Tesla is building a $1.1 billion manufacturing facility in Travis County — and the company announced last month that it was moving its headquarters to Austin. In addition, tech giant Samsung said it was considering building sites in Austin and Taylor for a $17 billion semiconductor plant, software giant Oracle announced Austin as a new corporate headquarters location, and construction continues on Apple’s $1 billion office campus in West Parmer Lane.

Statewide, the unemployment rate for October came in at 5.4% on a seasonally adjusted basis, according to the Texas Workforce Commission, down from 5.6% in September and from 7.3% in October 2020. Unadjusted for seasonal factors, the statewide rate was 4.8% last month .

The Texas Manpower Commission does not immediately adjust its metro area data for seasonal factors. But the Dallas Fed released the Austin-area seasonally adjusted numbers on Friday that pegged the local unemployment rate last month at 3.7%, identical for September and August.

Overall, the October unemployment rate in the Austin area was the lowest among major Texas metro areas, according to the Dallas Federal Reserve, with the Dallas area ranked second with a seasonally adjusted rate of 4.6%. The McAllen area in South Texas ranked highest among the state’s major metro areas at 9%.

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