Jobless claims in Texas decline

Job growth this fall may be an indicator of what the recovery will look like as businesses across the state are allowed to increase capacity and holiday hiring begins.

First-time unemployment claims fell to 49,644 in Texas in the week ended Saturday, a drop of 15,647 from the previous week’s number. This is the lowest number of claims since March, the beginning of the pandemic, and comes after consecutive weeks of rising claims.

Nationally, first-time unemployment claims were at 860,000, a drop of 33,000 from the previous week.

That number represents a modest downshift in the national claims because the previous week’s numbers were stagnant. Claims hit a peak of 6.9 million in late March as the economy shut down to try to slow the spread of coronavirus.

“It shows an improving labor market, but not a healthy labor market,” said Patrick Jankowski, the Greater Houston Partnership’s lead economist.

Weekly state unemployment claims usually fall between 12,000 to 14,000 in a healthy economy, Jankowski said, though he acknowledged the latest number were an improvement from April, when there were about 315,000 first-time claims.

It is possible fewer claims could be filed in the coming weeks as more businesses reopen in the wake of Gov. Greg Abbott’s Thursday announcement that businesses can increase capacities in regions where COVID hospitalizations are less than 15 percent of total hospitalizations.

As a result of the order, businesses such as restaurants, retail stores, libraries and gyms will be

able to increase their capacity to 75 percent from 50 percent.

The true test will be in the fall, Jankowski said. Generally, the economy experiences job growth in September, October and November in the run-up to the holidays. The number of claims then will indicate whether the Houston economy will continue to slowly inch its way to recovery.

The magnitude of the latest drop in claims could be a result of the Labor Day holiday, said Parker Harvey, an economist for Gulf Coast Workforce Solutions, a workforce development organization. With government offices closed, people had one less day to file their claims.

Public-facing businesses such as airlines, bars and restaurants, and retailers continue to struggle. The accommodation and food services industry reported about 200,000 fewer jobs this July than the year previous. About 4,400 claims were filed from former accommodation and food service employees in the week ending Sept. 5.

A survey by the National Restaurant Association of 3,500 Texas restaurant owners found that 50 percent said it was unlikely they would be in business in six months if no additional relief packages from the federal government were forthcoming.

The Democratic-controlled House passed a $3 trillion stimulus package in May; the Republican-controlled Senate did not take up the bill. Senate Republicans proposed a much more modest bill of up to $700 billion that would provide an additional $300 a week to unemployed workers affected by the pandemic, but Democrats opposed it this month.

As of now, Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi, D-Calif., have agreed to work on a short-term spending bill to avoid a government shutdown Oct. 1, which economists say would be devastating for an economic recovery.

“It would just be one more thing to affect consumer confidence,” Jankowski said.