Written by Vance Ginn and Kolten Morris
Recently, the U.S. Bureau of Labor Statistics released the Regional and State Employment and Unemployment Summary for March 2015. The following is a recap that highlights the report for the states with the largest populations and economies.
After a remarkable 53 consecutive months of positive nonfarm job creation in Texas, there was a decline of 25,400 in March. While one month doesn’t make a trend, this should be watched closely in the coming months. Lower oil prices and an appreciated dollar contributed to these job losses with 2,800 jobs lost in the oil and gas sector, 2,300 in manufacturing, and 14,500 in the service-providing industry. The twelve-month average of job creation is a positive 27,292 for an annual 327,500.
The state’s unemployment dropped again last month to the lowest since July 2007 at 4.2 percent. This provides a silver lining in the report signaling that the Texas model is effective. Additional bright spots include 2,400 jobs created in the financial services industry and 3,600 in healthcare.
The first figure shows Texas’ unemployment rate remains at least 1.3 percentage points lower than any of the other rates. March was the 99th consecutive month that the Lone Star State’s unemployment rate has been at or below the national average.
This lower 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 5.5 percent unemployment rate in March is near what some consider “full employment,” it doesn’t tell the whole story as noted by the drop in the nation’s labor force participation rate in the figure below. However, the same may not be said for Texas with the rate near it’s pre-Great Recession level.
Digging further in the data, the third figure presents data showing that Texas’ share of the population employed has rebounded since the Great Recession and is substantially higher than the national average and other states. Given the false signal a lower unemployment rate might send from fewer searching for a job, the employment-population ratio provides valuable information. This ratio might change from employment preferences, such as men or women deciding not to work to stay home with children or go back to school that would lower the ratio, but interestingly Texas far exceeds these other entities.
The fourth figure shows that annual job creation in Texas has been robust relative to these other states over much of the last decade-plus. However, several states are finally catching up to Texas in annual job creation as other states increase their job growth, which is good for Americans.
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 from a well-diversified economy. Even the nonfarm job losses were merely a blip compared with the rest of the nation.
Though this month’s job losses is concerning for Texans, there is much to remain positive about in the Lone Star State. If the state wants to continue to be the nation’s job creation engine, the 84th Texas Legislature should take steps to limit spending, reduce regulation, and cut taxes. By doing these things, Texans can be confident in their opportunity to succeed in this great state.
Vance Ginn is an Economist in the Center for Fiscal Policy at the Texas Public Policy Foundation.
Kolten Morris is an intern in the Center for Fiscal Policy at the Texas Public Policy Foundation.