Austin jobless rate at 2.6% as employers add jobs, labor force shrinks

Jobless rate is lowest since December 2000, according to state’s data.

A surge in local job creation and an unusual contraction in the labor force combined to help send the Austin-area unemployment rate to its lowest point in almost 17 years.

The metro-area jobless rate dropped to 2.6 percent in October, down from 2.9 percent the prior month and to its lowest point since it hit 2.3 percent in December 2000, according to preliminary data released Friday by the Texas Workforce Commission.

Despite the region’s tight labor market during the month, local employers added about 9,100 jobs, the commission said, an increase of 0.9 percent—about double the average rate for an October since 2000.

Professional, scientific and technical services firms, which provide many of Austin’s key high-tech jobs, added about 800 positions during the month. The region’s bars, restaurants and hotels added about 3,200 jobs, expanding their payrolls nearly four times faster than average for an October.

On the flip side, construction companies cut payrolls by 2 percent during the month, notably faster than the average decline for October but not an unprecedented dip, according to commission data.

Total metro-area payrolls now have expanded 2.2 percent over the past 12 months, a notable slowdown compared with the past four years of sizzling job growth. (That number often increases when the commission does its annual benchmarking of labor data.)

While the official unemployment rate fell, the improvement appeared to stem more from people leaving the labor force, rather than people finding jobs. The number of employed Central Texans declined 0.4 percent during the month — only the second time the employment rolls contracted in an October since 2000, according to commission data.

The labor force shrank by 0.7 percent during October, when it typically expands about 0.5 percent.

Still, Austin’s labor market remains exceptionally tight—with the unadjusted unemployment rate about a full percentage point lower than Texas and U.S. levels.

The commission does not immediately adjust its metro-level data for seasonal workforce patterns. At a statewide level, the seasonally adjusted unemployment rate fell in October to 3.9 percent, its lowest point in four decades, the commission said.

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