Leisure and hospitality jobs accounted for 10.6 percent of total nonfarm jobs in March 2020. Metros with larger shares of leisure and hospitality jobs, such Austin-Round Rock and San Antonio-New Braunfels, suffered more in the recession (Table 3).
Correlations Between Texas, U.S. Labor Markets
Economically, the U.S. suffered more than Texas in the pandemic recession, and Texas MSAs with economies that closely correlate with the U.S. economy suffered more than MSAs with economies that do not.
Correlations between Texas MSAs and U.S. job growth rates varied from more than 83 percent for Fort Worth-Arlington, San Antonio-New Braunfels, Dallas-Plano-Irving, and Austin-Round Rock to less than 50 percent for Laredo, Midland, College Station-Bryan, and Odessa (Table 4).
Oil Prices Take a Hit
Price of WTI crude oil fell from $57.50 per barrel in January 2020 to $16.61 in April 2020 (Figure 2). Texas metros with larger shares of mining jobs suffered more in the pandemic recession due to the price collapse. In March 2020, mining jobs accounted for 34 percent of nonfarm employment in Midland and 25.6 percent in Odessa. Consequently, these petroplexes bore the brunt of falling oil prices.
By September 2020, oil prices hovered around $40, not sufficient to stimulate overall economic conditions.
Regaining Texas Jobs
On March 5, President Trump signed an $8.3 billion emergency aid package to help combat the coronavirus and its adverse economic impacts. The Federal Reserve stepped in by:
- lowering the Federal funds rate to its zero lower bound;
- helping ensure interest rates will remain low;
- lowering long-term interest rates by purchasing massive amounts of long-term Treasury securities and mortgage-backed securities;
- providing short-term low interest rate loans to security firms (primary dealers); and
- offering Money Market Mutual Fund Liquidity Facility, repurchase agreement (repo) operations, and direct lending to banks, state and local governments, and other credit facilities.
From April to September 2020, the nation gained 11.4 million jobs because of actions by the U.S. government and the Federal Reserveand because of people's willingness to return to work. The gain accounted for 51.4 percent of jobs lost in the pandemic recession. Texas gained 660,300 jobs (47.1 percent of jobs lost in the recession) but remains more than 583,000 jobs below the year-ago level.
The latest job recovery indicator for Texas, defined as the ratio of the number of jobs in September 2020 to the number of jobs in April 2020 (seasonally adjusted and expressed as a percentage) stood at 94.2 percent (Table 5). Job recovery indexes among Texas industries currently vary from as high as 98.7 percent for the financial activities industry to 80.3 percent for the mining industry (Table 6).
National job gains are helping Texas MSA economies that track closely with the U.S. economy. Meanwhile, oil price recovery is helping metros with larger shares of mining jobs. As of September 2020, Texarkana and Waco ranked first in job recovery followed by Sherman-Denison, College Station-Bryan, Abilene, and Tyler. Midland had the smallest job recovery followed by Odessa, Beaumont-Port Arthur, Corpus Chisti, and Longview.
Dr. Anari (email@example.com) is a research economist with the Real Estate Center at Texas A&M University