Recently, the U.S. Bureau of Labor Statistics released the Regional and State Employment and Unemployment Summary for May 2015. The following is a recap that highlights the report for the states with the largest populations and economies and national averages.
After the one-month decline in March that ended 53 consecutive months of positive net nonfarm job creation in Texas, there were 33,200 jobs created in May and 2,100 in April. Lower oil prices and an appreciated U.S. dollar contributed to slower job creation in certain sectors with job declines of 6,000, a 2 percent decrease, in the oil and gas sector and 6,700 in manufacturing. But employment in the service-providing industry increased by 47,400. The twelve-month increase in net nonfarm job creation in Texas is 287,000 for an average monthly gain of 23,917.
Figure 1 shows that annual nonfarm job creation in Texas has been robust relative to these other entities during much of the last decade-plus. However, several states are finally creating jobs at a pace similar to Texas.
Texas’ unemployment rate ticked up 0.1 percent to 4.3 percent making last month the 101st consecutive month it has been at or below the national average. Figure 2 presents evidence that this rate is at least 1.2 percentage points lower than any of the other rates.
This lower unemployment rate feat is even more impressive when you consider how many Americans have stopped looking for work after an unsuccessful job search. While the nation’s reported 5.5 percent unemployment rate in May is near what some consider “full employment,” it doesn’t tell the whole story as noted by the drop in the nation’s labor force participation rate. However, Figure 3 shows that the same is not true for Texas with her rate near the pre-Great Recession level and certainly higher than the other rates.
Figure 4 presents data showing that Texas’ share of the population employed has rebounded since the Great Recession and is substantially higher than the national average and other states. Given the false signal a lower unemployment rate might send from fewer searching for a job, the employment-population ratio provides valuable information. This ratio might change from employment preferences, such as men or women deciding not to work to stay home with children or go back to school that would lower the ratio, but Texas far exceeds these other rates.
Figures 5 and 6 below illustrate that Texas has been the nation’s primary job creator since the last national recession, coined the Great Recession, began in December 2007. Total employment in Texas also didn’t decline during that recession when oil prices dropped substantially more than they have since last July—another indication that the current oil price drop may not cause severe consequences from an economy that’s well diversified and supported by pro-growth policies.
There is much to remain positive about in the Lone Star State after more jobs were created last month than in the previous two months. The Texas Legislature should continue to take steps to limit spending, reduce regulation, and cut taxes so that the success of the Texas model will continue to benefit all Texans.