Storm gave boost to jobs
Aid jump-started economy more than expected
Hurricane Harvey gave the Houston economy a bigger than expected boost as spending related to the recovery generated jobs in construction, retail and other sectors, according to revised data released Friday by the Texas Workforce Commission.
Houston added nearly 63,000 jobs last year, well above initial estimates of about 46,000, according to the revised data. As billions of dollars in insurance payments and federal disaster aid poured into the region after the epic flooding, analysts said, residents spent it at retailers to replace damaged household goods and hired contractors to repair damaged homes.
“It looks like last year was a lot better than we initially thought,” said Parker Harvey, principal economist for Workforce Solutions, which provides job services in the 13-county region.
One of the ironies of economics is that local and regional economies typically get a boost from natural disasters after initial disruptions caused by widespread destruction. In the case of Houston,
economists have estimated that more than $100 billion in federal assistance and insurance payouts poured into the region after the record-breaking storm, money that is being spent on rebuilding and creating construction and other jobs.
Dearly bought boost
Past disasters have borne out this phenomenon. With a few exceptions, notably New Orleans after Katrina, areas hit by hurricanes in the last 20 years had job growth rates superior to the U.S. average by 12 months after the storms. In Houston, jobs grew at 2.1 percent rate in 2017, compared to 1.5 percent nationally.
The economic boost, of course was dearly bought. At least 75 people died as a result of the storm that struck at the end of August. More than 70,000 single-family homes in the Houston metropolitan area were damaged or destroyed, as were nearly 11,000 apartments. Scores of small businesses shut their doors for good.
In the immediate aftermath of the storm, the region shed more than 10,000 jobs in September, according to revised seasonally adjusted data. The local economy, however, rebounded quickly, adding more than 37,000 jobs by the end of the year. In the last three months of 2017, Houston area employment grew by an average of more than 12,000 jobs a month, nearly double the 6,300 jobs a month added in the first three months of 2017, according to the revised data.
The U.S. Labor Department revises state level employment statistics annually, based on additional data that employers report over time. While 2017 ended up with stronger job growth than first thought, the revisions also showed that oil bust took an even bigger toll on local economy in 2015 and 2016.
Instead of the small gains reported earlier, the region shed jobs in both 2015, when oil prices collapsed, and 2016, when prices bottomed at $26 a barrel and a tentative recovery began. The region lost 2,500 jobs in 2015 and 2,200 in 2016, according to the revisions.
“While oil was stabilizing at the end of 2016,” said Harvey, “we were still losing oil and gas related jobs.”
The Texas Workforce Commission also reported Friday that Texas added 16,000 jobs in January, after gaining just 400 in December and 54,000 in November. Texas added 240,500 jobs over the past year, an increase of about 2 percent.
State unemployment up
The state unemployment rate rose to 4 percent in January, from 3.9 percent in December and its record low of 3.8 percent in November. The U.S. unemployment rate in January was 4.1 percent.
In January, the Houston area’s unemployment rate fell to 4.8 percent from 5.7 percent in January 2017, according to labor force data. The region added about 64,000 jobs from the previous January, a growth rate of 2.2 percent.