Yesterday, the U.S. Bureau of Labor Statistics released the Regional and State Employment and Unemployment Summary for January 2015. The figures below illustrate the Texas model’s success story.
The first figure shows data indicating that January marked the 97th consecutive month that the Lone Star State’s unemployment rate has been at or below the national average. Texas’ rate has also been well below the other three states with the largest economies and populations.
The second figure notes that this unemployment rate feat is even more impressive when you consider how many Americans have stopped looking for work after an unsuccessful job search. While the nation’s reported 5.7 percent unemployment rate in January is near what some consider “full employment,” it doesn’t tell the whole story as noted by the drop in the labor force participation rate. However, the same may not be said for Texas with the rate near it’s pre-recession level.
The third figure presents data showing that Texas’ share of the population employed has rebounded since the 2008-09 recession and is substantially higher than the national average and other states. These data also provide a better picture of the state of labor markets instead of the false signal of a lower unemployment rate from people stopping their job search, which relative to these other entities has not been the case in Texas.
The fourth figure shows that annual job creation in Texas has been robust relative to these other states. Instead of people dropping out of the labor force or leaving the state, people are flocking to Texas. By creating net nonfarm jobs to the tune of 369,400 in 2014, Texas has continued to add jobs faster than those entering the labor force. This job growth translates into a 3.5 percent annual pace statewide and an even faster rate of 3.9 percent—or 369,400 net jobs added—in the productive private sector.
The 55 percent drop in oil prices since last June led to a delayed decline in the number of Texas oil rigs that has trickled down to 3,400 fewer oil and gas jobs in January. Though this will likely take a toll on the economy and labor market in the coming months unless oil prices stabilize, Texas’ diversified economy helps it to withstand lower oil prices better than in the 1980s.
Even with this month’s substantial BLS revisions to their time series model to estimate nonfarm jobs since 1990, the last two figures show that Texas has been the nation’s primary job creator since the last national recession started in December 2007. Also notice that total employment in Texas didn’t decline during the 2008-09 recession when oil prices dropped substantially more than they have in the last seven months—another indication that the current oil price drop may not cause severe consequences. Even the nonfarm job losses were merely a blip compared with the rest of the nation.
Bottom line: January was another good month for Texans. To build on the Texas model’s success, the 84th Texas Legislature should be good stewards of taxpayer dollars by restraining spending growth and providing substantial tax relief.