08/23/2018
Labor Market Information
JULY2018 Employment Data
HOUSTON-THE WOODLANDS-SUGAR LAND METROPOLITAN STATISTICAL AREAVisit our website at
The rate of unemployment in the Houston-The Woodlands-Sugar Land Metropolitan Statistical Area (H-W-S MSA) fell two-tenths of a percentage point to 4.4 percent in July. Over the last year the rate of unemployment has declinedseven-tenths of a percentage point with some 18,000 fewer unemployed in the H-W-S MSA. The local rate of unemployment, while low,was slightly higher than 4.0 percent at the state level and4.1 percent at the national level, see figure 1.
Unemployment Rate (Actual)
JUL 2018 / JUN 2018 / JUL 2017Civilian Labor Force / 3,416,567 / 3,411,756 / 3,338,158
Total Employed / 3,266,189 / 3,254,479 / 3,169,503
Unemployed / 150,378 / 157,277 / 168,655
Unemployment Rate / 4.4% / 4.6% / 5.1%
Total Nonfarm Employment in the H-W-S MSA lost18,500 jobs in July. The 0.6 percent decline was primarily seasonal in nature and in line with the historical average for the month of July. The bulk of declines were in Government where staff at educational institutions was reduced for the summer months, down 18,500 jobs or 1.9 percent.Leisure and Hospitality also incurred a seasonal decline, down 6,300 jobs or 1.9 percent. The most substantial July increases were in Education and Health Services, up 2,900 jobs or 0.8 percent, Construction, up 2,500 jobs or 1.1 percent, and Wholesale Trade, up 1,700 jobs or 1.0 percent. See figure 2.
Total Nonfarm Employment in the H-W-S MSA was up 101,800 jobs over the year. The pace of job growth accelerated to 3.4 percent, its strongest level since February 2015 and more than twice the nation’s 1.6 percent, see figure 3. Job growth continues to be positive across most sectors. The bulk of new jobs were in three super sectors: Professional and Business Services, up 40,900 jobs or 8.5 percent; Construction, up 25,500 jobs or 11.9 percent; and Trade, Transportation & Utilities, up 15,300 jobs or 2.5 percent. The only industry super sectors to report a loss was Information, down 1,000 jobs or 3.1 percent, see figure 4.
Most substantial gains in Professional and Business Services were in Employment Services, up 13,500 jobs over the year, with additional gains found in Architectural, Engineering, and Related Services, Computer Systems Design and Related Services, and Services to Buildings and Dwellings. Constructionjob growth was strong across all sub-sectors with especially strong growth found in Construction of Buildings where Hurricane Harvey recovery efforts are under way, up 15,200 jobs or 26.9 percent. Growth in Trade, Transportation, & Utilities was largely driven by gains in Retail Trade, up 8,000 jobs or 2.6 percent, and Wholesale Trade, up 5,000 jobs or 3.0 percent.
Several industry sectors where the pace of job growth is typically higher driven by rapid population growth in the H-W-S MSA were adding jobs at a weaker than normal pace. Health Care and Social Serviceswas one area that has been undergoing significant changes with payrolls up 1.3 percent over the year, much lower than a historical average increase of 3.3 percent.Leisure and Hospitalityadded a mere 2,600 jobs over the year, up 0.8 percent, compared to a historical average increase of 3.1 percent. Lastly, Government payrolls were up only 1,300 jobs or 0.3 percent compared to a historical average increase of 1.8 percent.
Additional comments by super sector can be found beginning on page 5. Detailed data can be viewed on pages 11 & 12.
Seasonally adjusted estimates for the H-W-S MSA and U.S. seen in figure 5 and 6 provide an additional view of growth-trends removing the erratic month-to-month seasonal patterns. On a seasonally adjusted basis, Total Nonfarm Employment was up1,900 jobs in July and 101,900 jobs from one year earlier. The annual pace of job growth rose to 3.4 percent, more than more than twice the nation’s 1.6 percent pace. Overall growth of Total Nonfarm Employment in the H-W-S MSA has also outperformed the nation over the long-term as well with payrolls up 17.4 percent above the prerecession high compared tothe nation’s 7.7 percent increase.
Details by super sector
Mining and Loggingemployment held steady in July and added 1,400 jobs over the year,up 1.8 percent. Payrolls in the super sector remain well below their peak levels during the shale boom and may never recover all jobs lost as the industry becomes more efficient. Job gains have been primarily driven by hiring in Support Activities for Mining, where companies that perform most of the field services required in the physical extraction of oil and gas are found, up 3,100 jobs or 7.9 percent. Oil and Gas Extraction, where most engineering and office related services are performed to develop or operate oil and gas field properties, continues to report over-the-year losses, down 1,500 jobs or 4.0 percent, see figure 8.
The average U.S. rig countfell by 6in Julyto1,050, up 97 over the year and 641(156.7) percent from May 2016 when the rig count bottomed out at 409. The average Texas rig count accounted for all this month’s decline falling 9 to 525. While the average U.S. rig count has steadily risen it remains considerably lower than a peak of 1,930 in September 2014.
Constructionwas the second largest job-producing super sector for the month of July,up2,500 jobs or 1.1 percent. The majority gains were found in Construction of Buildings, up 1,800 jobs or 2.6 percent, with additional gains found in Heavy and Civil Engineering Construction, up 700 jobs or 1.4 percent. Construction is the fastest growing super sector in the H-W-S MSA with much of the growth driven by Hurricane Harvey recovery efforts that continue to this day, up 25,500 jobs or 11.9 percent over the year.Construction of Buildings was the single largest contributor with payrolls up an extraordinary 15,200 jobs or 26.9 percent, see figure 9. Job growth at Specialty Trade Contractors has also picked up in recent months with payrolls up 7,400 jobs or 6.7 percent over the year. Heavy and Civil Engineering was up2,900 jobs or 6.2 percent over the year.
Manufacturingpayrolls fell in July, down 800 jobs or 0.4 percent. A loss of 900 jobs in Nondurable Goods Manufacturing was responsible for the decline. Durable Goods Manufacturing managed a net increase of 100 jobs over the month despite a loss of 600 jobs in Machinery Manufacturing. The pace of job growth in Manufacturing declined for the third consecutive month with payrolls up 6,500 jobs or 2.9 percent over the year. The increase was driven by gains in Durable Goods Manufacturing, up 6,700 jobs or 4.8 percent. Job gains were found in Fabricated Metal Product Manufacturing, up 3,100 jobs or 6.3 percent, andAgriculture, Construction, and Mining Machinery Manufacturing, up 2,400 jobs or 8.7 percent. Job growth in the durable goods sector have been driven by increased drilling activity supported by higher oil prices.Looking back, Durable Goods Manufacturing has recoveredsome 11,300 jobsof 46,800 jobs lost during the last downturn, see figure 10.
Non-durable Goods Manufacturing reported a slight loss of 200 jobsover the year.The Houston Purchasing Managers Index increased by 6.5 points in July to 62.0 indicating expanding economic activity in the region over the next several months.
The Houston PMI indicates likely shifts in production three or four months in advance. Readings over 50 generally indicate production expansion over the near term, while readings below 50 show coming contraction.
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Trade Transportation, Warehousing & Utilitiesadded1,900 jobs in July. The increase was driven by an addition of 1,700 jobs in Wholes Trade, up 1.0 percent. The super sector added 15,300 jobs over the year with the pace of job growth at 2.5 percent. The largest contributor to the increase was Retail Trade where growth has been particularly strong along the Grand Parkway in support of population growth with payrolls up8,000 jobs or 2.6 percent.While employment in Retail Trade has expanded overall,several retail sectors were reporting declines including a notable loss of 900 jobs at Departments Stores, down 4.6 percent. Wholesale Trade was the second largest contributor to job growth in the super sector with payrolls up 5,000 jobs or 3.0 percent over the year in support of demand for durable goods being produced in the manufacturing super sector.Transportation, Warehousing, and Utilities also benefits from a healthy energy sector and overall improvements in the local economy with payrolls up2,300 jobs or 1.6 percent over the year.
Informationadded 200 jobs in July with payrolls down 1,000 jobs or 3.1 percentover the year. About half of the MSA’s employment in Information resides in Telecommunications where payrolls were down 500 jobs or 3.6 percent over the year. The remainder of the declines were in areas such as newspaper and periodical publishing, software publishing, motion picture and sound recording, and data processing hosting and related services. The Information super sector continues to suffer from declines over the long term due to several issues including, but not limited to, automation, growth in wireless communications, and changes in customers demand and access to media.
Financial Activitiesreported its first over-the-month loss of the year, down 600 jobs. The decline was driven by a loss of 700 jobsin Real Estate and Rental and Leasing, down 1.1 percent.The pace of job growth in Financial Activitiesfell as a result from 2.7 percent to 2.0 percent representing an increase of 3,200 jobs over the year. Real Estate and Rental and Leasing was responsible for most of the increase with payrolls up 3,300 jobs or 5.6 percent driven bystrong home sales and increased rental and leasing activity. Depository Credit Intermediation, where banking, savings institutions, and credit unions are found, reported a substantial decline of 600 jobs, down 2.0 percent.
Professional and Business Servicesadded 1,100 jobs in July. While July tends to be anunpredictable month that payrolls can rise or fall, the0.2 percent increase was in line with the long-term average. The increase was a result of an addition of 2,500 jobs, 1.1 percent, in Professional, Scientific, and Technical Services. Over-the-month gains were held to a minimum by a substantial loss of 1,500 jobs in Services to Buildings and Dwellings, down 2.6 percent. The Professional and Business Services super sector has reported record breaking job growth in recent months contributing the largest number of new jobs in the H-W-S MSA over the last year, up 40,900 jobs or 8.5 percent. Job gains were widespread, but the strongest growthhas been in Administrative and Support Services whereEmployment Services was up 13,500 jobs or 16.4 percent and Services to Buildings and Dwellings was up 3,900 jobs or 7.6 percent. Businesses within Professional, Scientific, and Technical Services accounted for much of the remaining increase with payrolls also expanding at a rapid pace, up 17,600 jobs or 8.0 percent over the year. Within this sector we find strongest gains in Architectural, Engineering, and Related Services, up 3,900 jobs or 6.0 percent, and Computer Systems Design and Related Services, up 1,800 jobs or 5.7 percent. The only area showing weakness was Accounting, Tax Preparation, Bookkeeping, and Payroll Services where payrolls were down 200 jobs over the year.
Education and Health Servicesadded 2,900 jobs in July, up 0.8 percent. A strong increase of 3,800 jobs, 2.4 percent, in Ambulatory Health Care Services was responsible for the gain. July gains in health-related industries were offset by a seasonal loss of 700 jobs in Educational Services. The pace of job growth in Education and Health Services rose sharply from 0.2 percent in June to 1.5 percent representing an increase of 5,600 jobs over the year. Job gains in Ambulatory Health Care Services was responsible for most of the increase.After eleven straight months of reporting declines, Hospitals posted an over-the-year increase, up 800 jobs or 0.9 percent.The pace of job growth in Educational Services also improved rising from 1.5 percent in June to 2.1 percent, up 1,200 jobs.
Leisure and Hospitalityreported a loss of 6,300 jobs in July, down 1.9 percent. While a reduction in payrolls is normal for the month of July the current decline was substantially larger than the long-term average of 1,675 jobs. The Leisure and Hospitality super sector added a mere 2,600 jobs over the year withthe pace of job growth fallingto 0.8 percent, much lower than the historical average of 3.1 percent. More than half of the new jobs were in Food Services and Drinking Place, up 1,600 jobs or 0.6 percent, but strongest job gains were in Accommodation, up 900 jobs or 3.3 percent.
Other Servicesreported a loss of 900 jobs in July with payrolls up 500 jobs or 0.5 percent over the year. Other Services is comprised ofpersonal care services, dry cleaning and laundry services, various repair service companies(industrial equipment, mining machinery and equipment), as well as the previously mentionedreligious and social advocacy organizations and others.
Government reduced payrolls by 18,500 jobs in July as educational institutions made reductions for the summer, down 4.5 percent. Most of the decline was in Local Government Educational Services, down 18,100 jobs or 8.8 percent, with additional declines in State Government Educational Services, down 1,900 jobs or 3.8 percent. The pace of job growth in Government continued to be weak with payrolls up 1,300 jobs or 0.3 percent over the year. Most of the increase was in Local Government, up 1,100 jobs. Local Government Educational Serviceswas responsible for the increase adding 2,400 jobs over the year suggesting that areas of local government not related to education suffered a combined loss of 1,300 jobs.
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08/23/2018
Houston-The Woodlands-Sugar Land MSA: Includes Austin, Brazoria, Chambers, Ft. Bend, Galveston, Harris, Liberty, Montgomery, and Waller Counties. All Data is Subject to Revision.
Sources: U.S. Department of Labor, BLS, Texas Workforce Commission,Institute for Supply Management, Baker Hughes, and The Federal Reserve Bank of Dallas.
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