Statewide, Texas' jobless rate reaches record low of 3.5%.

The Austin area’s jobless rate continued to tighten last month, hitting a 20-year low for the month of May.

Austin’s unemployment rate fell to 2.2%, according to the Texas Workforce Commission, a level it last hit in May 1999. The overall jobless rate in the Austin metro area registered 2.3% in April this year and 2.7% in May 2018. The May rate has not been adjusted for seasonal factors.

“The Austin area keeps breaking records, and it indicates significant growth and investment,” said Michael Sury, a University of Texas finance lecturer and an economist.

The largest employment gains year-over-year were in Austin’s key economic sectors of information technology, finance and professional services, Sury said.

Professional networking site LinkedIn has pegged Austin as the top city in the United States in terms of attracting job seekers, based on an analysis of information posted by its users across the country.

Guy Berger, principal economist at LinkedIn, said there is no reason why the labor market can’t continue tightening in the future, especially in Texas.

“In order to stem the growing labor shortages in places like Austin and Dallas, more workers will need to move in from other places,” Berger said.

A number of economists have identified the extremely tight labor market in the Austin area as the Achilles heel that could eventually hobble the region’s growth, because employers won’t be able to increase output indefinitely if they can’t find enough workers. The natural rate of unemployment generally is pegged at 4.5% to 5%.

“At this point, we are well under that natural rate,” Sury said. “Where we are now at 2.2% is just something we haven't seen before. At some point that level is just not sustainable.”

Austin also was ranked recently as having the worst traffic congestion in Texas -- and among the worst in the world. TomTom, a Dutch company that makes navigation systems, pegged Austin as No. 179 globally, and No. 19 in the United States, among its index of 403 cities worldwide with the most congestion, based on 2018 traffic.

For Texas as a whole, the May unemployment rate came in at a seasonally adjusted 3.5% — breaking the previous record low of 3.7% set in April.

BOOM: Texas hits a new historic low unemployment rate of 3.5 percent in May and leads the nation for jobs added over the last 12 months.#TexasWorks#txlegepic.twitter.com/0qhzDXMgFF

— Gov. Greg Abbott (@GovAbbott)June 21, 2019

“Our historically low unemployment rate is excellent news for Texas workers,” Julian Alvarez, the workforce commission’s commissioner representing labor, said in a written statement. “As more Texans find stable employment they are able to invest in their communities and future generations of Texas workers.”

The workforce commission doesn't immediately adjust its metro level data for seasonal factors, but the Federal Reserve Bank of Dallas released seasonally adjusted numbers for the Austin metro area Friday. Those numbers put the region's unemployment rate last month at 2.5% compared with 2.6% in April.

The low unemployment rate comes amid concerns by businesses statewide and nationally, which have been rattled by rising international trade tensions. The Federal Reserve Bank of Dallas said this month that the issue has begun to curtail output in the Texas manufacturing and retail sectors.

President Donald Trump imposed new tariffs on Chinese imports May 10, and he threatened on May 30 to implement a tariff on all imports from Mexico unless the Mexican government agreed to stem the flow of undocumented immigrants into the United States. The tariff on goods from Mexico didn't go into effect, however, because a deal to avert it was reached two weeks ago.

This week, Round Rock-based Dell Technologies joined fellow technology giants HP Inc., Intel Corp. and Microsoft Corp. in opposing Trump’s proposed tariffs on laptop computers and tablets among $300 billion in Chinese goods targeted for duties.

However, it’s unlikely that tariffs will have much of an impact on unemployment numbers in Texas or the Austin area, economists say.

Sury said he doesn’t expect tariffs to affect the local economy, which generally has been resilient to import and export tariffs.

And Berger expects the state to mostly fend off the impact of the Trump administration's tariffs.

“Texas is a large, diversified economy, so the impact of trade wars should remain minimal, at least for now,” Berger said, adding that tariffs are likely hurting some export-oriented industries in the state like agriculture and manufacturing.

American-Statesman reporter Bob Sechler contributed to this report.