S.A. jobless rate jumps in November

Economist says growth of positions in Texas slowed with the surge of the coronavirus

The San Antonio-area unemployment rate bumped up in November as the coronavirus surged and the economy struggled to find solid footing.

The metro area’s unemployment rate hit 7.8 percent in November, up from 6.6 percent in October, according to the Federal Reserve Bank of Dallas.

Keith Phillips, Dallas Fed assistant vice president and senior economist, said the state’s employment situation weakened and job growth slowed in November with the coronavirus surge.

“It was only about a third of the job growth we saw in October in the private sector,” he said. Job growth remained positive, “which is a good thing, and leisure and hospitality continue to kind of rebound, although it remains significantly down since pre-COVID levels.”

San Antonio’s job growth rate of 1.4 percent is significantly weaker than the state’s rate of 4 percent, Phillips said.

The Dallas Fed expected an economic slowdown with the spike in virus cases, and the downturn will likely continue through December, according to Phillips. The current slump is less severe than during the summer surge largely because of businesses adapting to operating during the pandemic.

Looking forward, “we expect very weak jobs activity in Texas over the next couple of months, but as the vaccination starts to spread and people become more comfortable, we’re going to see a return to pretty healthy growth,”

Phillips said. “But not enough to recover all the jobs lost, so we think we’ll end the year (2021) below pre-COVID levels.”

The Dallas Fed predicts Texas will finish 2020 down more than 680,800 jobs from 2019.

San Antonio saw job growth slow by 6.7 percent from February through November, which trails other major Texas metros including Dallas, Houston and Austin.

“Between midyear and now,

San Antonio has really kind of struggled to come back, and this makes sense — we’re very much a tourism sector,” Phillips said.

San Antonio’s leisure and hospitality has taken a hit, with 1 of every 4 jobs at restaurants, hotels and amusement parks now gone.

Phillips said the pandemic also has hit the local health care sector hard. It’s shed more than 3 percent of its jobs since February.

The key to an economic rebound is a combination of continued success with the COVID vaccine and a federal stimulus package, according to David Macpherson, chairman of Trinity University’s economics department.

“If the stimulus goes through and with the vaccine there’s no hiccups, the second half of 2021will be so much better than where we are right now, but the first half is going to be rough until these people start getting the vaccine distributed,” he said. “All these big job losses will start to dissipate because that stimulus will help keep up spending, and the vaccine will help people be willing to spend money in travel and restaurants and education.”

Currently, the industries in the region with the most workers filing claims for unemployment benefits are full- and limited-service restaurants, temporary help services, food service contractors, and elementary and secondary schools, according to Texas Workforce Commission.

TWC fielded more than 12,500 new claims for unemployment benefits in the region in November.

“As we’re approaching year end, and a lot of these support payments are going away, and we haven’t yet had another (federal) support package passed, I think people really are wanting and needing to get back and work,” Phillips said. “And so you’ve seen the increase in the labor force and an increase in the number of unemployed as people return

to the labor force and try to find jobs.”

More than 89,000 people currently are unemployed in the San Antonio area, up roughly 14,500 from last month, according to the TWC.

“The other thing to keep in mind is that the number of long-term unemployed is also increasing,” said Steven Nivin, chairman of the economics department at St. Mary’s University. “Typically, these workers will have a more difficult time finding employment the longer they are unemployed.”

The state’s unemployment rate was 8.1 percent, above the national average of 6.7 percent.

“Assuming the pandemic gets under control, the economy will continue to improve as we get back to more normal economic activity,” Nivin said. “I think we will still see unemployment a bit above the longterm average for most of the year but certainly improving.”

“Between midyear and now, San Antonio has really kind of struggled to to come back, and this makes sense — we’re very much a tourism sector.” Keith Phillips, Dallas Fed assistant vice president and senior economist