Jobless claims in Texas drop below 100,000

About 90,000 people in Texas applied for unemployment benefits last week, according to the Department of Labor, the first time that weekly initial claims have dropped below 100,000 in more than two months.

In recent weeks, new claims for benefits have dropped from unfathomably high rates — in late March and early April, when local officials implemented stay-at-home orders, claims surpassed 300,000 per week. But weekly claims are still more than six times higher than pre-coronavirus rates; typically, about 14,000 people apply for unemployment benefits in Texas each week.

In the U.S., 1.5 million people filed for unemployment benefits last week, retreating further from the highs of nearly 7 million per week in late March.

The data aligns with other economic indicators that show that the dramatic ero

sion of business activity sparked by shutdown orders is beginning to rebound slightly, even if overall economic activity continues to contract.

On Wednesday, the Houston Purchasing Manager’s index, a well-regarded gauge of production activity based on surveys of supply chain managers, showed a similar trend; the index recovered 5.6 points to 40.2 in May. That means the local economy is still contracting at a significant rate; readings below 50 indicate a contraction in goods production, and readings below 45 indicate a contraction for the broader economy.

The Texas Workforce Commission, the state’s unemployment agency, said last week that unemployment benefits will be extended for another 13 weeks since the state triggered an emergency federal program after reporting a high unemployment rate for April. That means claimants will be eligible for a full year of unemployment benefits; the state program of 26 weeks had already been extended 13 weeks by the Coronavirus Aid, Relief and Economic Security Act.

Texas’ unemployment rate was 12.8 percent in April, marking the highest jobless rate on record, going back to 1976. May data for Texas will be released later this month, but national data also showed that employers have begun to add some jobs back after the dramatic shutdown in economic activity.