Texas jobless rate hit 12.8% record high
APRIL DATA: Worst could be over as pace of layoffs slows
Unemployment soared to record levels in Texas last month as employers slashed 1.3 million jobs amid the coronavirus pandemic that shut down most of the state’s economy.
The state’s unemployment rate jumped to 12.8 percent in April, more than double the 5.1 percent rate in March, and marking the highest jobless rate since the data series began in 1976, the Texas Workforce Commission reported Friday.
In the Houston area, employers cut 317,400 jobs in April after shedding 28,000 in March, which combined were more than twice the number the region lost during the entire Great Recession, which lasted 18 months. The local unemployment rate jumped to 14.2 percent in April, up from 4
percent from a year ago.
The steep job losses in Texas were spread across every industry, with leisure and hospitality the hardest hit. The sector, which encompasses restaurants, hotels, museums, music and sporting venues, lost nearly 1 in 4 jobs last month after local governments issued stay-at-home orders and shut down businesses to slow the spread of the coronavirus.
The energy industry, a critical driver of the state and local economies, was also hard hit as demand for gasoline, jet fuel and other petroleum products plummeted, helping to drive oil prices into negative territory in late April. The mining and logging sector, which is dominated here by the oil and gas industry, slashed 1 in 10 jobs in Texas last month.
Over that past year in Houston, the sector lost nearly 1 in 5 jobs. The local economy, meanwhile, contracted in April at the fastest pace since the worst months of the Great Recession, according to the Houston Purchasing Managers Index, a closely watched indicator of economic activity.
“COVID-19 is in the driver’s seat,” said Patrick Jankowski, senior vice president of research at the Greater Houston Partnership.
Joshua Lee Johnson, 26, of Texas City, is still hoping to be called back to his $14.50- an-hour-job as a technician for a car wash servicing company that furloughed him two months ago. In the meantime, he has contacted several staffing agencies, checking in frequently for updates.
He’s also applying to grocery stores, telecommunication companies, pest control operations and cellphone providers but so far, no interviews.
“I’m just going stir crazy,” he said.
Texas, like many other states, is slowly reopening its economy. Bars were allowed to open Friday with seating limits and dine-in restaurants, which reopened May 1, to increase eat-in capacity to 50 percent. Nonessential manufacturing plants got the green light to go back to work Monday and a slow trickle of law firms, engineering consultants and energy companies have moved desks and installed plastic shields to bring employees back to the office.
But shopping mall crowds are still thin with many retailers opting to stay closed and shoppers worried whether it’s safe to venture out. Most movie theaters remain closed despite permission to reopen because many studios are releasing new movies through streaming services.
Nearly 1 in 5 U.S. consumers say they’d prefer to wait at least a month before venturing out and better than 1 in 10 say they’ll probably wait at least three months, according to a survey by the personal finance company Bankrate.
This hesitation forecasts a slow recovery for a national economy in which consumer spending accounts for about 70 percent of economic activity. Few economists expect the quick snapback that was hoped for early in the crisis. A study by the University of Chicago estimated that 42 percent of the record layoffs may be permanent.
More than 38 million Americans, including some 2 million in Texas, have filed first time claims for unemployment benefits over the past two months. Signs, however, have emerged that the worst may be over.
While jobless claims remain high, the pace of layoffs appears to have slowed. In Texas, 130,000 workers filed for benefits, less than half the 315,000 during the week ending April 4. Nationally, 2.4 million people filed jobless claims, about one-third the 6.6 million filed in early April.
“We’ve passed the turning point,” said Bill Gilmer, director of the Institute for Regional Forecasting at the University of Houston.
Sabrina Harris hopes so. She’s waiting for a call telling her when she can return to her part-time job unloading trucks and stocking merchandise for a discount store that sells clothing and housewares in Houston. The store, which was closed for two months, reopened this week.
Harris, 51, said her boss has already contacted her. The next truck should arrive in a couple of weeks.
Harris works another job in customer service, but her hours were cut. Her car, insurance and rent payments weren’t.
“I feel a lot better than I did a couple of weeks ago,” she said. “Things were really piling up.”