The Federal Reserve Bank of Dallas has noted that although payroll employment in Texas contracted by 1.25 million jobs in March and April, it was less severe of a contraction than in other parts of the country.
Of the different sectors studied, the leisure and hospitality sector saw the largest decline 530,000 jobs (or 37.2%). The least-affected sector was financial activities, which saw a decline of 11,200 jobs (1.4%).
All of the state’s major metropolitan areas saw a decrease. The steepest declines came in El Paso, Fort Worth, and Austin, although Houston, San Antonio and Dallas also were affected.
The jobless rate in the United States in April was 14.7%, and although Texas’ unemployment rate was 12.8% that month, it was still much higher than February’s 3.5%.
Fewer individuals filed initial claims for unemployment insurance in the week that ended June 6 to 81,000 and were 30% lower than the previous week.
The Federal Reserve Bank of Dallas suggests that unemployment will continue to be elevated this year. It estimates that the unemployment rate will be 8.9% at the end of the year, and that overall employment will be 3.8% lower for December 2020 than the previous year.
It’s possible that Texas’ spike in unemployment was smaller than the country overall because there were fewer people who were actively looking for work. The Fed noted that the labor force participation rate was 58.3%, compared to the nationwide average of 60.2%.
Executives' Texas Business Outlook Surveys (TBOS) and some of the data released by the Federal Reserve Bank of Dallas came from that survey. For example, the production index contracted much more slowly from -55.6 to -28.0, which the Fed notes is a sign that manufacturing businesses are putting out more product and work.
The service sector also saw improvement from the drastic declines in March and April; the headline index for service sector conditions increased from -65.3 to -28.1 in May.
More than half of the respondents who participated in the TBOS said they could remain in business more than a year if current revenues did not improve. Nearly 25% said they could stay in business for no more than six months.
The survey also revealed that nearly 69% of employers had more employees working from home. When it comes to work-hour reductions, 43.2% admitted they had to take that step, and 16.7% said they also had to reduce wages.