Perspective On Central Texas Economy From Austin Chamber of Commerce

By: Beverly Kerr, Vice President, Research

Austin has the fastest rate of job growth and the second lowest unemployment rate among large U.S. metros
according to the U.S. Bureau of Labor Statistics’ (BLS) Friday release of Metropolitan Area Employment and Unemployment for January 2014.

Labor market data for Austin through January was released earlier this month by theTexas Workforce Commission and reported on in the Chamber’s March 11th “Central Texas Economy” article. However, the data for all U.S. metros that we often use to rank job growth and unemployment had yet to be released by the BLS.

Nonfarm Payroll Jobs

Austin’s job growth of 4.5% over the 12 months ending in January seemed likely to be at or near the top and it does prove to be the fastest rate of growth among the 50 largest U.S. metros. San Jose follows at No. 2, with 4.4% job growth and Houston and Dallas also rank in the top 10. Fort Worth and San Antonio rank 15th and 22nd respectively.

 

Not only is Austin’s 4.5% growth fastest among the top 50 metros, it is fastest among the top 100 U.S. metros as well. Among the 100 largest metros, Austin also has the fastest rate of job growth over the last 5 years (15%) and the last 10 years (35%).

With the exception of Nashville, each of the best performing metros is located in Texas, California or Florida, and these are also the three states with the largest year-over-year job increases.

What sectors are contributing most to job growth varies among the ten fastest growing large metros. Goods producing industries (manufacturing, construction and natural resources) is most significant in Houston and San Jose (23.0% and 22.4% respectively), with Fort Lauderdale and Nashville also gaining more than 20% of new jobs from good producing industries. Good producing accounts for the smallest share of new jobs in Austin and Dallas (10.9% and 4.5% respectively). Only in San Jose did manufacturing account for the majority of new goods producing jobs.

In Austin, two industries, professional and business services and leisure and hospitality, have seen the fastest rates of job growth (7.0% and 10.1% respectively), and together account for half of the 37,700 jobs created in Austin in the last 12 months. (The two industries only account for 27.4% of all jobs in January.)

While professional and business services grew by 7.0% in Austin, Nashville and Jacksonville saw even faster growth. San Francisco saw a slightly lower growth rate, however, the industry accounted for 41.5% of new jobs created in the last 12 months, compared to 23.6% in Austin.

Austin’s 10.1% growth in leisure and hospitality is faster than any of the other top 10 metros, but the industry accounts for a larger share of new jobs in Orlando (28.3%) and Jacksonville (28.9%) than in Austin where the 9,500 new leisure and hospitality jobs represents 25.2% of total new jobs.

The following graph illustrates the varying contributions of each of the major industry sectors to total job growth for Austin and the next two fastest growing metros.

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Labor Force, Employment & Unemployment

Austin’s unemployment rate, at 4.7% in January, is the second lowest among the top 50 metros. San Antonio, with a rate of 5.4%, is also in the top ten. Houston, Fort Worth, and Dallas rank 11th, 12th, and 13th respectively. Out of 372 U.S. metros, 367 have lower rates of unemployment than a year earlier. Among large metros, the highest rate of unemployment is the Providence, RI metro, with 10.3%. Los Angeles, Riverside, and Detroit have rates at or above 9.0%.

Austin’s labor force grew by 19,700 or 2.0% in the last twelve months, while employed grew by 30,700 or 3.3%. Jacksonville topped the 50 largest metros for both labor force and employment growth, however its unemployment rate is at 6.0%, landing it 21st in that ranking.

Unemployment data, along with civilian labor force and employment, are released in tandem with nonfarm payroll jobs data each month, but it is important to know that the two sets of estimates are the product of different surveys and estimating programs (one of households and the other of businesses) that do not always produce estimates that move in concert.

Labor force minus unemployment equals employment in the “Local Area Unemployment Statistics.” Employment in the sense of this survey is residents who are employed, while the “Current Employment Statistics” estimate of nonfarm payroll jobs is jobs reported on payrolls by employers (one person may hold more than one job). The LAUS data represents employed persons residing in the geographic area reported and CES data represents jobs at employers located in the geographic area reported.

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The Chamber’s Economic Indicators page provides up-to-date historical spreadsheet versions of Austin, Texas and U.S. data for both the Current Employment Statistics (CES) and Local Area Unemployment Statistics (LAUS) data addressed above.

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