COVID surge slowing Texas’ recovery

The Texas economic recovery continues, but a resurgence of the virus likely contributed to a slowdown in the service and retail sectors and weighed on job growth, according to the Federal Reserve Bank of Dallas.

The Dallas Fed estimates that the state will lose 539,000 jobs this year, a 4.2 percent decrease. The forecast has improved slightly from September, when the economists projected a 4.8 percent decline, but Texas employment remains on track to shrink for the first time since 2009, the bottom of the Great Recession.

Texas’ unemployment rate has crept up over the last fewmonths, another sign that the recovery is slowing. The Texas unemployment rate rose to 8.3 percent in September from 6.8 percent in August, exceeding the national rate for the first time since March, according to the Labor Department. In September, unemployment across the country averaged 7.9 percent.

Both the state and national economies, however, have improved significantly from the spring, when widespread business shutdowns from the coronavirus pandemic drove the jobless rate to 13.5 percent in Texas and 14.7 percent nationally.

First-time unemployment insurance claims continue to trend downward after record highs in late March and early April, when initial claims in the state surpassed 300,000 per week in Texas and approached 7 million nationally. Last week, first-time claims fell by 48,000 nationally to 709,000 and declined by nearly 5,200 in Texas to about 34,000.

Certain sectors performed well in September and October, according to the Dallas Fed’s business outlook surveys. Both manufacturing and services grew robust ly in September. Manufacturing continued to gain momentum

in October, but services and retail executives reported slowing expansion.

The count of operating oil rigs Texas has increased since September, suggesting modest improvement in the energy sector.

Economists, however, say the recovery hinges on the progress of coronavirus. They have warned that a surge in COVID-19 infections could lead to another economic contraction.

The United States hit a record number of coronavirus hospitalizations Tuesday and surpassed 1million newconfirmed cases in just the first 10 days of November, with few signs the pace will slow, according to the Associated Press. Texas this week became the first state to exceed 1 million COVID-19 cases.

Public health officials fear the newwave could become larger and more widespread than surges in the spring and summer.