Job growth slows in Texas amid spike in COVID cases
Job growth in Texas slowed sharply in August as COVID-19 cases spiked with the emergence of the highly infectious delta variant, curtailing activity, spending and hiring.
Texas employers added 39,000 jobs last month, plunging by more than half from the 94,000 jobs gained in July. It was the weakest monthly job growth since April.
The August slowdown in Houston and Texas reflected similar weakness in hiring nationally. Economists have attributed the disappointing job growth to the resurgence of the pandemic, particularly in states such as Texas where vaccination rates have been low. The spread of the delta variant has made both consumers and employers cautious, analysts said.
Rachel Austin, CEO of the public relations firm Hometown Social, said nearly all her bar and restaurant clients are operating at about 80 to 90 percent staffing and fewer customers are coming in.
At 8th Wonder Brewery and Distillery in
East Downtown, Ryan Soroka, president and co-founder, said they have yet to return to pre-pandemic staffing levels because business has slowed recently, and it remains uncertain when it might rebound — and whether that will last. He said the pandemic, which led to widespread layoffs across the industry, has made many restaurants cautious about hiring.
“We’re all thinking about how to avoid getting over our skis,” he said.
Texas was averaging fewer than 1,000 daily COVID cases in early July, but the delta variant drove those numbers back to levels not seen since before vaccines were widely available. On Friday, the state recorded nearly 14,000 new cases, according to the Texas Department of State Health Services.
The leisure and hospitality industry, which includes restaurants, bars, hotels and other consumer-facing businesses, has borne the brunt of the fourth wave of COVID-19. In Houston, for example, hotels and restaurants reported widespread cancellations as COVID cases spiked just as the Offshore Technology Conference, one of the world’s largest energy trade shows, was about to start.
Leisure and hospitality shed more than 25,000 jobs across the state last month.
‘A long ways off ’
Hiring slowed in the Houston area last month, too, but less dramatically than it did statewide.
The local economy created about 15,000 jobs last month, down from about 17,000 in July, according to the Texas Workforce Commission.
“It was definitely weaker than expected,” Patrick Jankowski, senior vice president of research at the Greater Houston Partnership, said of the report. “We’ve moved closer to a full recovery, but we’re still a long ways off.”
Texas still has 210,000 fewer jobs than before the recovery began.
Houston employment is down 137,000 jobs from pre-pandemic levels.
Local staffing agencies said their clients have had to reassess hiring requirements and practices. Many employers have struggled to fill jobs, and the rapid rise in COVID-19 infections has made hiring more difficult.
Some companies have “put a pause” on hiring since the emergence of the delta variant this summer, said Travis Leonard, managing director at the Houston staffing company Clayton Services. Those who are still trying to fill positions are finding they must raise pay with the shortage of workers.
“We’re having a hard time getting anyone to work for less than $15 an hour,” he said. “I have never seen anything like this before, ever, in my life. It’s a wild market right now, that’s for sure.”
A shortage of workers has also been blamed for the slower job growth as positions remain unfilled. Leslie Jordan, president of the staffing company LK Jordan, said workers have the upper hand in today’s job market.
Jordan said she had expected more workers to apply for jobs as 26 states, including Texas, ended federal emergency programs that paid generous unemployment benefits and many employers blamed for their difficulties in finding workers. But that hasn’t happened.
“What we’re seeing is clients coming to us desperate to find candidates,” she said. “It is affecting everything from the supply chain to manufacturing to restaurants with longer wait times. It’s just really difficult.”
Reasons for optimism?
The state unemployment rate fell to 5.9 percent from 6.2 percent in July but remains above the national unemployment rate of 5.2 percent in August. The unemployment rate in Houston was 6.1 percent, down from 8.1 percent a year ago.
Parker Harvey, economist at Gulf Coast Workforce Solutions, said he expects it to take at least a few years for a return to normalcy for the regional economy, but the trends of recent months, even with the August slowdown, make him optimistic about the direction of the recovery.
“Viewed as a whole,” he said, “July and August have helped to maintain, if not add to, recent momentum for the Houston area.”