Texas jobless rate drops to lowest in 40 years

Texas’ unemployment rate in November fell to its lowest rate in four decades. Here, Eric Doncaster and Bradley Doncaster inquire about jobs at the FESCO booth at Laredo Community College during the 6th Annual Hiring Red, White and You! Job Fair held by South Texas Workforce Solutions. less Texas’ unemployment rate in November fell to its lowest rate in four decades. Here, Eric Doncaster and Bradley Doncaster inquire about jobs at the FESCO booth at Laredo Community College during the 6th Annual ... more Photo: Danny Zaragoza /Laredo Morning Times Photo: Danny Zaragoza /Laredo Morning Times Image 1 of / 1 Caption Close Texas jobless rate drops to lowest in 40 years 1 / 1 Back to Gallery

The unemployment rate in Texas fell to its lowest level on record last month as the manufacturing and service sectors continued to gain traction and the state bounced back from Hurricane Harvey.

The November jobless rate fell to 3.8 percent from 3.9 percent in October, the lowest since the Federal Reserve Bank of Dallas started keeping records in January 1976 when the unemployment rate was 5.9 percent. The rate for the San Antonio metro area, which takes in New Braunfels, held steady at 3.8 percent.

“Today’s announcement of our record low unemployment rate is further proof that the Texas model of low taxes and reasonable regulations is working better than ever,” Gov. Greg Abbott said in a news release. “This record of 3.8 percent is also a testament to our diverse and talented workforce that is attracting new businesses to the state every day and driving our booming economy.”

The unemployment rate remained well below the long-term average of 6.0 percent and below the national average of 4.1 percent. The tight labor market is making it difficult for employers to find qualified workers and putting pressure them to raise wages.

“I think we’re seeing wage pressures across many industries,” said Keith Phillips, assistant vice president for the bank’s San Antonio branch. “There’s continued good news on the job front and a little bit of extra kick to San Antonio to kind of help rebuild the Gulf Coast and also to house the residents as they rebuild their homes.”

According to the Texas Workforce Commission, nine of 11 major industry sectors added positions. The state’s annual employment growth was 2.7 percent, making for 91 consecutive months of annual growth.

The U.S. economy has fully recovered its losses from the financial crisis of last decade as the S&P 500 and Dow Jones Industrial Index hit all-time highs on Monday. The Federal Reserve, which has kept interest rates near zero for the better part of a decade, raised rates earlier this month for the third time this year to keep the economy from overheating. The S&P has surged 19.9 percent while the Dow is up 25.3 percent so far this year.

The Dallas Fed noted Wednesday that the Interstate 35 corridor markets of Dallas-Fort Worth and Austin-San Antonio led the state’s job growth, while the San Antonio region continued to see a boost from the aftermath of the August storm.

“Construction jobs in San Antonio were having a good year already, but since August they’ve accelerated,” Phillips said. “Over the last three months ending in November construction has grown at an annual rate of 14.9 percent, and I think that’s construction firms here hiring people and then taking crews down to the Gulf Coast.” Prior to the storm, the construction industry had an annualized growth rate of 5.6 percent.

The leisure and hospitality sector saw a surge in hiring as the Federal Emergency Management Agency put owners of destroyed homes up in San Antonio hotel rooms. While industry hiring flattened in November, it had jumped from a 3.7 percent annualized growth rate in August to a 17.1 percent annualized rate over the three subsequent months, Phillips said.

While the Dallas Fed lowered the year’s job growth estimates to account for people displaced by Harvey, from 3.0 percent to 2.4 percent, it was still higher than the state’s long-term trend of 2.1 percent.

The sore spot for the San Antonio region was retail, in part due to Mexican nationals thumbing their nose at U.S. retailers.

“Retail’s a big industry in San Antonio but it’s going through a transition here similar to the national transition where less people are going to brick and mortar and more people buying online,” Phillips said. “Plus, we’ve had this kind of less interest of Mexican nationals to come and shop here this year with all that’s going on politically.”

President Donald Trump during his campaign made derogatory comments about Mexico, and his continued push for a border wall and threats to withdraw from the North American Free Trade Agreement have not gone well south of the border.

According to the Economic Policy Institute, 36 states added jobs from August to through November, with Idaho, Utah, California and Texas ranking the highest in employment growth. Thirteen states saw a rise in people filing for unemployment during the time period, and six states plus the District of Columbia saw no change.

lbrezosky@express-news.net | On Twitter @lbrezosky