The most recent employment data indicates that the pace of hiring in Texas has slowed.

In September, 40,700 net new jobs were added, compared to 111,900 in August.

Moreover, the unemployment rate rose and is now higher than the national level. Not great news, but not unexpected. 

Texas employment peaked in February 2020 at about 13.0 million. By April, 1.4 million jobs had been lost to the pandemic. As of September, Texas employment stood at almost 12.3 million, down from over 12.8 million in September 2019. Although over 660,000 jobs have been regained, that’s not quite half of the number lost since before the pandemic. In addition, all growth that would otherwise have occurred has been foregone. Thus, the losses from where the state should be are even greater.

Unfortunately, it’s not surprising that hiring has slowed. The first few months of opening the economy involved resumption of businesses such as retail stores and restaurants which involve large numbers of employees. Essentially, those jobs were the low-hanging fruit.

It’s also not surprising to see the pattern of recovery in Texas be somewhat different from other states or the nation. The timing and severity of outbreaks and reopening decisions have varied widely across states. As a result, states will enter phases of recovery at different times. Although Texas lost 583,600 jobs between September 2019 and September 2020, other states fared even worse including California (down 1,488,900) and New York (down 1,102,800). The pandemic has wreaked havoc, and the road back will be slow in many parts of the country. 

Like the nation, Texas is recovering. However, the failure by Congress to enact a new, large stimulus package is delaying and threatening to derail the comeback. Federal deficits are a problem, but one for another day. The CARES Act, while certainly not perfect, helped to keep the basic structure of the economy together during the worst of the pandemic. Unfortunately, it was implicitly based on the presumption that the dislocations would only require assistance for 2-3 months. We are now well beyond that point, and an increasing number of businesses and households are exhausting their liquidity. We are seeing this phenomenon play out in the continuing high levels of weekly initial claims for unemployment, which in effect reflect new layoffs. 

We would all love to see hiring strengthen in a sustainable and meaningful way, letting people get back to work and a sense of normalcy. However, the recovery is going to be uneven at best and will likely not fully occur until there are effective vaccines and/or treatments which are widely available. In the interim, we need to do everything possible to minimize disruptions to families, businesses, and the economy. Stay safe!


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