Unemployment rate drops in face of virus
Houston adding jobs, but the region remains down about150K fromwhere itwas last year
The Texas unemployment rate fell sharply in October as employers added more than 100,000 jobs, but economists caution that another economic contraction could be on the horizon as COVID-19 cases and hospitalizations soar.
Unemployment plunged to 6.9 percent last month after surging to 8.3 percent in September, the
TexasWorkforce Commission reported Friday. The national unemployment rate in October also was 6.9 percent.
Employment in Texas grew by 118,000 jobs, up 1 percent from September. But employment is still down 4 percent or about 500,000 jobs from a year ago.
Houston employers added about 39,000jobs in October, but the region still has 150,000 fewer jobs than a year ago. The local unemployment rate was 7.7 percent, up from 3.6 percent in Oct. 2019.
Patrick Jankowski, an economist at the Greater Houston Partnership, a business-financed economic development group, said the October statistics could overstate the strength of the economy since they were collected before COVID-19 cases started to surge. The U.S. shattered another record for hospitalizations with more than 80,000 patients admitted as of Thursday, according to the COVID Tracking Project launched by the Atlantic.
More than 250,000 people
have died from COVID-19 in the United States. In Texas, some 1.1 million have contracted the disease and more than 20,000 have died from it.
Additionally, stronger than usual hiring for the holidays may also have skewed the October employment numbers higher, Jankowski said. “My concern is that we might not see these robust numbers the week before Christmas,” Jankowski said, referencing when the state will release November statistics.
But the progress Houston has made shouldn’t be dismissed, he said. Houston has recouped 54 percent of the jobs lost since the beginning of the pandemic, he said, although it could still take years for the region to regain all the jobs lost in the pandemic-driven recession.
If job growth reverts to historical average of 6,000 to 10,000 a month, it could take anywhere from 18 months to three years to recoup all the losses, Jankowski said.
“If you look at (the job loss) inoilandgas and manufacturing,” Jankowski said, “I believe it’s going to take closer to three years.”
Although the October’s job numbers may appear optimistic, restaurant owner LingWang is not. She has three restaurants in the Houston area: Spicy Girl, Wula Buhan and the Trendy Dumpling.
She employs more than 45 people at the three locations but estimates she had to lay off 30 percent of her workers over the course of the pandemic. Wula Buhan, in the Energy Corridor, and Spicy Girl, in Midtown, both relied on the lunch rush from nearby offices, but that business has slowed dramatically with people working from home.
The recent spike in cases has her worried that business will slow further. She’s not even sure a vaccine would turn around the business.
“Even if the vaccine comes out, how soon can these offices come back?” Wang said. “They just might have more people working from home.”
Ray Perryman, CEO of the Perryman Group, an economic consulting firm in Waco, said a sustained economic recovery is unlikely until the virus is contained and the pandemic brought under control.
“The economic crisis is the direct result of the health crisis,” Perryman said. “We cannot fully revive the lost jobs and output until we have an effective strategy with regard to the pandemic.”
Wang said the federal Paycheck Protection Program, which provided her a low-interest loan of $23,000, took off a little pressure, but it barely covered one month’s rent at just two of her locations. Meanwhile, she hopes delivery and takeoutwill keep her business afloat until the end of the pandemic.
“We are going to keep holding on,” Wang said. “We are not going to let go.”