Austin jobless rate dips to 20-year low

Get ready for the already abundant “Help Wanted” signs around Austin to multiply, because the region's latest unemployment rate is once again at a 20-year monthly low and growth in the pool of available workers is continuing to ebb.

The local jobless rate for August came in at 2.8%, according to the Texas Workforce Commission, about average so far in 2019 but the lowest level for the month of August since 1999, when it hit 2.2%. Unemployment in the Austin metro area registered 2.9% in July this year and 3.1% in August 2018.

"The Austin (job) market is white-hot," said Michael Sury, a University of Texas economist and finance lecturer. "It points to the fact that Austin continues to be a very strong draw for high-growth businesses."

Meanwhile, the local civilian labor force hasn't been expanding as fast as in previous years, potentially stretching the pool of available workers even thinner. The labor force increased by 1.6% during the 12-month period ending in August, Workforce Commission data shows, compared with growth rates of 2.8% and 3.5% during the 12-month periods ending in August 2018 and August 2017, respectively.

The Federal Reserve Bank of Dallas has attributed the slowdown partly to a slower in-migration of workers from other parts of the country to Texas overall, saying the long-running U.S. economic expansion appears to have reduced some of the incentives for people to pull up stakes and move for greener pastures.

But other economists said they've seen little indication that the booming economy in the Austin metro area — which includes Travis, Williamson, Hays, Bastrop and Caldwell counties — has lost any of its edge nationally.

Guy Berger, principal economist at networking site LinkedIn, said Austin continues to be a magnet for job seekers, at least among the professionals who use his company's services. For August, LinkedIn once again listed Austin as the top major metro in the country in terms of pulling in workers from elsewhere.

"It does not look to me like a place that is losing its attraction power," Berger said.

Sury agreed, saying the slowdown in labor market growth instead is probably the result of "saturation" after years of big gains, rather than a "reversal of trend."

Austin "has been such a big draw," he said. "I think (the slowdown) is just a natural result of the growth that we've seen."

Regardless, the upshot for Austin-area employers is likely to be even more difficulty hiring amid the region's already tight labor market, as they're squeezed between the sub-3% unemployment rate and an ebbing flow of new workers entering the local labor force.

Statewide, the unemployment rate for August came in at a seasonally adjusted 3.4%, according to the Workforce Commission, a record low that has held steady since June.

The state agency doesn't immediately adjust its metro level data for seasonal factors, which smooths out the data. But the Dallas Fed released seasonally adjusted numbers for the Austin metro area Friday that pegged the local unemployment rate for August at 2.7%, identical to July but down from 2.9% in August 2018.

Hiring in the Austin area over the past 12 months has been led by 7,800 new jobs in professional and business services, the industry category that includes most of the technology sector, according to the Workforce Commission. Jobs in the category have grown 4.1% since August 2018, bringing the region’s total to about 198,000.

The employment sector that includes retail and wholesale trade — which tracks closely with population growth — added 5,900 new jobs over the 12-month period, a 3.3% increase that puts the total in the category at about 186,000. The leisure and hospitality sector has added 4,400 jobs, or 3.3%, for a total of about 136,000.

The latest employment figures point to "continued, strong, balanced local job generation," Drew Scheberle, a senior vice president at the Greater Austin Chamber of Commerce, said in a written statement. "Most indications from local job creators and real estate leaders suggest that people are continuing to move to the region at a rate consistent with recent history."

Overall, the August unemployment rate in the Austin area was the lowest among Texas’ major metro areas, according to the Dallas Fed, with the San Antonio-New Braunfels region in second place at a seasonally adjusted 3.1%. The McAllen region in South Texas came in highest among the state’s major metro areas, at 6.1%.

Keith Phillips, senior economist at the Dallas Fed, said in a written statement Friday that job growth statewide slowed in August “after two consecutive months of strong growth," with the Dallas Fed's surveys of business leaders coming in slightly negative amid "heightened trade and political uncertainty.”

As a result, he projected full-year job growth for 2019 at 2.3%, off by a small amount from 2.4% growth last year.