The Economy At A Glance:
Employment Update — Houston area employment was unchanged in May at 2,995,100 jobs, the same level at which employment stood in April. The region lost jobs in several sectors, added jobs in several others, and remained essentially unchanged in a few more. The gains offset the losses, resulting in the zero net job growth for the month. In the 35 years for which employment data are readily available, this stasis is unprecedented—Houston recording neither job gains nor job losses in a month. Examining job growth over a 12-month period helps to smooth out the impact of seasonal factors (retail hiring in the fall, education layoffs in the summer) that occur every year, and helps place current job growth in the context of historical job growth. For the 12 months ending May ’16, the region created 5,100 jobs, a far cry from the 66,400 jobs created in the 12 months ending May ’15, or the 98,500 jobs created in the 12 months ending May ’14. The most recent 12-month total underscores the weakness in Houston’s economy. If Houston experiences job losses in June, something that has occurred only twice in the past 35 years, Houston’s 12-month total may turn negative. That said, the job losses would need to exceed 2,000 to drop Houston into the red for the 12-month total.
Since December ’14, the start of the energy downturn, manufacturing has lost 31,300 jobs, energy, 24,700 jobs, professional services, 18,200 jobs, and trade, transportation and utilities, 12,100 jobs. Over the same period, hotels, restaurants and bars have added 25,600 jobs, healthcare 20,100 jobs, government (mainly education) 9,900 jobs, and arts, entertainment and recreation, 6,300 jobs. Houston’s unemployment rate remained unchanged in May at 4.8 percent. The Texas rate was also unchanged at 4.2 percent. The U.S. rate dropped from 4.7 in April to 4.5 percent in May. The Houston rate is now above that of the U.S. The rates are not seasonally adjusted.
On the Bright Side — Despite the current slump, Houston’s long-term outlook remains bright, according the latest report by The Perryman Group.1 “The Houston-The Woodlands Sugar Land MSA has stabilized after adjusting to job losses associated with lower oil prices,” the report notes. “Although additional fallout may well occur, it appears that the area is set for stronger growth. Over the long term, oil price recovery will lead to a resurgence in energy sector businesses, adding to the expansion across the rest of the area economy.”