In the latest sign that Austin’s economic recovery from COVID-19 is continuing, the region’s unemployment rate fell last month to its lowest point since the start of the pandemic.
The unemployment rate in the Austin metropolitan area stood at 3.8% in August, according to the Texas Workforce Commission. That’s down from 4.2% in July and 5.5% in August 2020. Metropolitan area figures are from Travis, Williamson, Hays, Bastrop and Caldwell counties.
Area employers added 1,400 jobs last month, according to the Texas Workforce Commission, bringing total non-farm jobs to 1.24 million – roughly the same with the number of people employed in the Austin area in February 2020, just before COVID-19 hit the economy nationwide.
Following:Texas economy faces hurdles, but growth is still on target
Following:Austin’s unemployment rate fell to 4.2% in July, the lowest since COVID hit
Following:Hill’s Cafe site in South Austin for $ 180 million
Nearly 140,000 local non-farm jobs were cut in March and April last year amid the initial shock of the pandemic.
Austin’s current unemployment rate indicates how far the recovery has progressed since last year, when unemployment hit a pandemic peak of around 12% in April 2020.
After that spike, the unemployment rate spent months hovering within a monthly range of around 5% to 6%, roughly double the pre-pandemic levels since the region’s unemployment rate was 2. 6% in February 2020.
The unemployment rate in the Austin metropolitan area remains below the Texas rate and the national rate, both of which stand at 5.3%, according to the Texas Workforce Commission.
The rapid comeback from past downturns is not surprising, said Ray Perryman, a Waco-based economist. The pandemic “was an entirely different animal” as there were no big speculative bubbles or structural issues seen in a typical downturn.
“Clearly, this report is encouraging overall,” said Perryman. The state and region of Austin continue to create jobs and growth is relatively diverse. The strength of business and professional services is a distinct positive aspect of the report, as it indicates that offices are opening and resuming more normal activity. . “
However, the outlook will depend on whether the delta variant of COVID-19 can be brought under control, he said.
“The overall pace of growth slowed somewhat in August, as it did nationally, reflecting the increase in COVID infections and hospitalizations,” Perryman said. “In particular, the leisure and hospitality sector has seen a sharp decline after months of very large gains. This industry has suffered by far the greatest job loss during the pandemic and is the most vulnerable to it. increased prevalence of the virus. “
Austin industries that posted significant employment growth from August to September include professional and business services, which added 1,900 jobs, education and health services, which added 3,700 jobs, and commerce, transport and public services, with 1,200 additional jobs.
However, the leisure and hospitality sector, which includes restaurants, bars and hotels, was hit in August, shedding 5,800 jobs.
Although Austin’s leisure and hospitality sector has been hit hard by the pandemic and is still suffering, it has seen the strongest regional employment growth in the past 12 months, with an increase in 22% employment, according to Workforce Solutions Capital Area.
Tamara Atkinson, CEO of Workforce Solutions, said Austin’s tight job market puts pressure on Austin-area employers scrambling to hire workers.
“Talent shortages are felt across all industries and across all salary ranges,” she said. “We especially see employers who have entry and mid-level jobs leaving the unfilled ones, and it really hurts their business to operate on a large scale and grow.”
The Austin metropolitan area saw a 10% increase in average annual wages for all industries in the first quarter of 2021 compared to a year ago, according to Workforce Solutions. That’s almost double the 5.4% increase in the rest of the state.
“It’s a market of job seekers for sure,” Atkinson said. “We’re finding that people can choose where they want to work for this entry-level or part-time job, and that puts a lot of pressure on the wages and benefits they offer.”
Jobs in the service sector are particularly difficult to fill. Employees who may have worked in restaurant, retail, childcare or hospitality before are finding new opportunities in other industries, including technology.
Online retail giant Amazon, for example, announced last July the opening of a sorting center in Kyle that will bring more than 200 jobs to the city south of Austin.
The jobs are in addition to 1,000 slated for a Pflugerville facility that Amazon says will open this year, along with hundreds more that the Seattle-based company intends to add in the Austin area. Round Rock as it continues to expand here.
Statewide, Amazon has more than 20,000 employees.
Austin economist Angelos Angelou predicts Austin’s unemployment rate “will only go down.” This will increase competition among employers for workers, he said.
“Everyone is going to scramble and everyone is going to poach locally from other employers,” he said. “Employees have so many other choices to work and explore other opportunities. It’s very difficult to keep them.”
Mark Sprague, who tracks the economy and housing markets at the local and national levels, said Austin’s 3.8% unemployment rate means the Austin metropolitan area is essentially at full employment.
He said he expects this to continue as the region attracts more and more large employers keen to tap into the labor pool.
Over the past 12 to 15 months, Austin has seen electric carmaker Tesla choose it as the site for a billion-dollar assembly plant, and software giant Oracle has announced Austin as the new location for its the head office. Meanwhile, construction continues on Apple’s billion-dollar office campus on West Parmer Lane.
“COVID and an ice storm haven’t slowed us down, and I don’t see anything else that will at this time,” said Sprague, chief information officer at Independence Title in Austin. “We are where California was 50 years ago – we still have relatively cheap land and labor, and we will continue to attract workers and more headquarters and expansions.”
Perryman, however, added a word of caution as the recovery continues.
“The August numbers are strong, but point to potential difficulties going forward,” Perryman said. “The economies of the Texas and Austin areas are expected to continue improving over the next few months, but the pace will be affected by the trend of coronavirus cases.”