Spotlight on the Austin-Round Rock, Texas Labor Market
The labor market of the Austin-Round Rock HMA is faring well with the total nonfarm payroll jobs increasing at a rate of 1.6 percent for the fourth quarter of 2014, as compared to the 1.1 percent increase in the same period for the Southwest region.
The steady growth in the national labor market has been one of the major stories of the current economic recovery. Since total nonfarm payrolls hit a post-recession low of 129.7 million in February 2010, the number of jobs has increased 10.9 percent to 143.8 million in March 2016. The national unemployment rate, which peaked at 10 percent in October 2009, dropped to 5 percent in March. These improvements have been welcomed by many who tout the stronger economy as beneficial for all workers. However, even though the national job picture may be bright, some areas of the country are failing to see the benefits of the economic recovery. Taking a closer look at economic trends in regions and in smaller housing market areas is a helpful way to understand how certain parts of the country are faring compared with the nation as a whole.
The housing market area (HMA) of Austin-Round Rock, Texas, which was highlighted in a recently released comprehensive housing market analysis, has seen a steady increase in job growth following a decrease in 2009 during the national recession. Total nonfarm payrolls jobs in Austin-Round Rock have risen each year since 2010, from 779,900 to 944,800 in 2015 – a total increase of 21.1 percent and an average annual growth rate of 3.2 percent. Furthermore, the 2015 unemployment rate in the Austin-Round Rock HMA was 3.3 percent, down from 4.2 percent in 2014 and a post-recession peak of 7.0 percent in 2010. The 2015 unemployment rate is the lowest for the area since it hit 3.0 percent in 2000.
Labor market improvements in Austin-Round Rock between 2010 and 2015 were led by job growth (in both absolute and percentage terms) in the professional and business services, leisure and hospitality, trade, and education and health services sectors. Professional and business services jobs increased by 44,200 jobs, or 39.1 percent, to 157,300 in 2015. Leisure and hospitality jobs increased by 27,300 jobs, or 31.9 percent, to 112,800 total jobs in 2015; trade jobs increased by 25,500, or 21.1 percent, to 146,100; and education and health services jobs grew by 23,200 jobs, or 26.4 percent, to 111,000 jobs for the year.
These figures seem to indicate that the labor market of the Austin-Round Rock HMA is faring well, especially when compared against trends in the national labor market. The same can be said when comparing the Austin-Round Rock HMA with its HUD region, the Southwest. In the fourth quarter of 2015, the most recent quarter for which a regional report was released, total nonfarm payroll jobs in the region reached 17.69 million, an increase of 1.1 percent from the same period in 2014. Total nonfarm payroll jobs in Austin-Round Rock’s home state of Texas increased 1.6 percent in the fourth quarter, accounting for more than 95 percent of job growth in the region. The unemployment rate for both Texas and the Southwest region was 4.6 percent in the fourth quarter.
These data suggest that the labor market of Austin-Round Rock HMA is performing relatively well compared with Texas, the Southwest region, and the national figures, but it does not mean this is the case everywhere. For instance, total nonfarm payrolls in the Midland, Texas metropolitan statistical area, which has the state’s largest job exposure to the energy sector, declined 2.3 percent between 2014 and 2015, from 94,900 to 92,700. This decline was largely driven by a 9.1 percent decrease in mining, logging, and construction sector jobs, from 28,400 to 25,800, because of the negative effect of falling oil prices on oil-related employment. These job losses come after total nonfarm payroll jobs in the area increased 30 percent between 2010 and 2014, from 70,500 to 94,900, and mining, logging, and construction sector jobs increased from 15,800 to 28,400, or 80 percent, over the same period.
The examples above illustrate the importance of considering the diverse economic situations of different areas of the country before putting too much stock in national economic statistics. A more localized analysis, much like the comprehensive housing market analyses conducted by HUD’s Office of Policy Development and Research, may be necessary to truly understand how job growth and labor trends affect different areas of the country. A narrower picture would help developers, lenders, policymakers, and other stakeholders concerned with economic conditions in a certain area shape a more comprehensive view of the local economy.