The San Antonio area and state of Texas are ending the year with record employment, although the scorching labor market is cooling as the Federal Reserve continues to pump the brakes on the economy.
The metro area added 7,747 jobs in November, according to data released Friday by the Texas Workforce Commission, pushing total employment to nearly 1.21 million. The unemployment rate edged down to 3.4 percent from October’s 3.5 percent rate. A year ago, unemployment was at 4.1 percent in the San Antonio-New Braunfels area.
State payrolls swelled by 33,600 jobs, bringing total employment of 13,672,900. That’s fewer than half as many jobs as Texas added in May, June, or July. The Texas unemployment rate remained unchanged from October, at 4.1 percent.
The leisure and hospitality sector led the statewide gains, adding 20,200 jobs statewide on a seasonally adjusted basis. It’s a sign that the sector, which lost more jobs than any other during the COVID-19 pandemic, continues to recover.
Education and health services added 5,400 positions over the month.
The mining and logging sector, which encompasses jobs in the energy industry, added 3,800 jobs, bringing total gains in the sector over the past 12 months to 42,200 — an increase of 22.7 percent.
Most sectors saw modest gains over the month. The state’s construction sector, however, shed 3,900 jobs in November, as the Fed’s aggressive interest-rate hikes have had a chilling effect on home starts as well as home sales, in Texas and across the country.
On Wednesday, while announcing the latest rate increase, Federal Reserve Chair Jerome Powell said that the members of the Federal Open Market Committee expect to see the unemployment rise in 2023, to perhaps 4.6 percent nationwide.
In some ways, he suggested, that would be a good thing, as the labor market is currently “extremely tight” and “out of balance” and large-scale layoffs are not likely, even as GDP growth slows and many economists expect a recession next year.
“The reports we get from the field are that companies are very reluctant to lay people off — other than the tech companies, which is, you know, a story unto itself,” Powell said. “Generally, companies want to hold onto the workers they have because it’s been very, very hard to hire.”
Gus Faucher, chief economist of The PNC Financial Services Group, said Friday seconded that point.
“The current labor market is unsustainable, from the Fed’s perspective, in that it is leading to strong wage inflation that is driving overall inflation over that 2 percent objective,” Faucher said.
Still, he continued, businesses will be reluctant to lay off workers given their experiences this year — which is one reason the Pittsburgh-headquartered bank is forecasting a mild recession over three quarters of next year.
“I would expect to see limited job losses, and that will protect household incomes and protect consumer spending,” Faucher said.
Across the state in November, the lowest unemployment was in the Amarillo, Austin-Round Rock and Midland metro areas, with each at a not seasonally adjusted rate of 2.8 percent. The highest rates were in the McAllen-Edinburg-Mission area, at 6.4 percent, and Beaumont-Port Arthur, at 6 percent.
erica.grieder@chron.com