Texas employers added 40,000 jobs in September, more than doubling the number added the previous month when hiring slowed to its lowest rate since early 2021.
The new jobs also brought down the state’s unemployment rate slightly to 4%, a decline of 0.1 percentage points from the previous month, according to data released Friday by the Texas Workforce Commission.
“Growth slowed in August so we were concerned,” said Pia Orrenius, senior economist at the Federal Reserve Bank of Dallas. “We didn’t know if it was a one-off or the beginning of a more steep slowing phase. But it bounced back in September to a really healthy number.”
Texas hit a new employment high in September for the 11th consecutive month, with nonfarm payrolls reaching 13.6 million.
Nationally, only Florida outpaced Texas in job gains for the month, with 48,000, according to a report from the U.S. Bureau of Labor Statistics.
“Texas’ total nonfarm job annual growth rate has outpaced the United States for the last 15 months, demonstrating one of the key factors that make Texas the top choice for employers and their workforce,” said TWC Chairman Bryan Daniel in a statement.
In the last year, Texas led all states by adding 721,800 jobs – a 5.6% increase over September 2021. The state’s labor force participation rate of 63.6% last month also exceeded the national mark.
“Texas is the land of opportunity where people want to live and work — and where businesses want to invest and grow,” said Gov. Greg Abbott in a statement. He is up for re-election Nov. 8 and cites job and business growth during his tenure as an accomplishment.
Employment in the Lone Star State has increased 3.6% since the start of the year, outpacing the nation’s 2.2% growth rate, according to research firm Beacon Economics.
“Despite a steady stream of anxious headlines about the broader economy, the Texas labor market continues to show strength and resilience, outperforming the national economy by a wide margin this year,” said Taner Osman, research manager at Beacon Economics.
The Dallas Fed is forecasting 3% job growth for the remainder of the year.
“We’re still slowing, but it’s very gently slowing and we’re still showing strong growth overall,” Orrenius said.
The Houston area led September’s job growth, adding 10,600 positions. Dallas-Fort Worth employers added 7,800 jobs.
In September, the leisure and hospitality industry was the biggest contributor to Texas’ job growth, adding 25,700 jobs, up nearly 12% from the same month last year.
Trade, transportation and utilities also had a good month, adding 7,600 jobs. Health care and social assistance added 6,200 jobs, pushing it to 1.8% over its pre-pandemic peak. Real estate and rental leasing created 5,800 jobs, a 2.2% increase from August and a nearly 20% increase from a year ago.
“More people in Texas are working today than ever before. In fact, more people in Texas are working than the entire population of the state of Pennsylvania,” said Julian Alvarez, TWC commissioner representing labor.
Construction was one of the sectors with the most job losses from August to September, falling from 785,900 to 783,300. That’s partly because construction is an interest rate-sensitive field where higher costs lead to lower demand, Orrenius said.
Other sectors with notable declines included administrative support, which shed 7,000 jobs, and government, which lost 3,100 jobs.
While job postings were strong for oil and gas, job growth slowed, likely due to labor shortages hitting the industry, according to the Texas Independent Producers and Royalty Owners Association.
The Dallas Fed is still hearing complaints from business owners about having trouble hiring workers, Orrenius said. Some firms are struggling to hire back workers who were laid off during the COVID-19 pandemic.
While talk of recession has amplified in recent weeks, Orrenius said the Dallas Fed isn’t expecting a sharp downturn to hit Texas.
“It’s possible the U.S. will have a mild recession next year, but it’s possible we won’t get into a recession,” she said. “We are not forecasting a recession for Texas right now because we’re still growing so much faster than the nation.”
