| March 4, 2010
EMPLOYMENT
Nonfarm payroll employment in the 10-county Houston metropolitan area fell 84,900, or 3.3 percent, from January ’09 to January ’10, according to estimates released today by the Texas Workforce Commission. The January performance represents an improvement from revised over-the-year losses of more than 100,000 jobs in November and December, and it’s the smallest over-the-year decline since 75,300 last June. Losses averaged 3.5 percent in Q3/09 and 3.8 percent in Q4/09.
Houston’s one-month loss from December to January was 45,300 jobs, or 1.8 percent. This decline is about what we’d expected, since the average December-to-January change for the previous five years was 1.8 percent. Retail trade alone shed 16,900 jobs over the month as temporary hires for the holidays were let go.
Houston’s goods-producing sectors took a drubbing over the year, losing more than one job in 10. Mining and logging, which in Houston is almost entirely oil and gas, lost 3,700 jobs, or 4.1 percent. Construction employment fell by 27,900, or one job in seven. Manufacturing payrolls were down 22,600 jobs, or one in 11. The category that includes oilfield equipment manufacturing fell 12.6 percent, shedding 4,000 jobs.
The only major sectors to post job gains from January to January were educational services, up 4.2 percent (1,700 jobs); health care and social assistance, up 4.7 percent (11,500); and government, up 2.0 percent (7,300). More than 70 percent of the government gain was in local public education, which added 5,200 jobs.
As always, the preliminary estimates for January were accompanied by the annual “benchmark” revision, in this case affecting all of ’08 and ’09. These benchmark revisions often paint a vastly different picture of the preceding year or more, but this year was an exception—at least in the aggregate. The largest change to a preliminary estimate was 3.5 percent, and most months saw much less than that.
A handful of individual industries underwent substantial revisions:
· The transportation category that includes warehousing and waterborne shipping had been a source of concern as it appeared to erode sharply throughout ’09. The revisions added 9,600 jobs to the preliminary December ’09 estimate for this category, indicating that last year’s decline was chimerical.
· The December estimate for employment services was reduced by 12,300, or nearly 20 percent. A rise in temporary employment is often a harbinger of economic recovery, so this change is a disappointment. The January estimate of 46,600 jobs in this category is the lowest level in nearly 15 years.
· Heavy and civil engineering was revised downward by 8,200 jobs, or nearly a fifth.
· Mining and logging—again, largely oil and gas—was revised downward by 3,800, or 4 percent. Jobs in this industry are especially important because it is the only Houston industry with average annual pay above $100,000, making it especially important to other industries that rely heavily on discretionary spending.
· Health care and social assistance, which has grown throughout the recession, added 5,600 more jobs than the preliminary estimates had indicated.
Unemployment in metropolitan Houston rose in January to 8.8 percent, the highest level locally since September ’87, when it stood at 9.0 percent. Data users should be aware, however, that this data series is notoriously difficult to use analytically. When an economy worsens, job seekers often quit looking, and therefore are no longer considered unemployed, bringing down the unemployment rate. As the economy improves, those people begin to seek employment again, and so are counted as unemployed, raising the unemployment rate.
February employment estimates are scheduled for release on March 25.
Skip Kasdorf
Manager, Economic Research
Greater Houston Partnership
Research Department
1200 Smith, Suite 700
Houston, TX 77002-4400
Phone: 713-844-3615
Fax: 713-844-0215
E-mail: kasdorf@houston.org
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