Austin jobless rate drops to lowest point in five years

In 2013 Austin had its worst year for job creation since the recession — but it would still be a stretch to describe the local labor market as anything other than robust.

Employers in the metro area added 23,700 jobs during 2013, an increase of 2.8 percent, according to preliminary data released Friday by the Texas Workforce Commission. It was the first time Austin’s annual job-creation rate dipped under 3 percent since 2009.

Despite the mild deceleration, Central Texas employers still created enough jobs to absorb a wave of new residents, to pull more existing Austinites into jobs and to help push the area’s unemployment rate to its lowest point in more than five years.

The local jobless rate dropped to 4.5 percent in December, down from 4.7 percent the month before, the workforce commission said.

“It’s hard to gripe about having one of the lowest unemployment numbers in the nation,” said Mark Sprague, the state director of information capital for Independence Title.

The workforce commission doesn’t immediately adjust its local data to account for seasonal hiring trends, and its preliminary figures are certain to fluctuate after the commission benchmarks its data in the coming months.

But seasonal adjustments calculated by the Federal Reserve Bank of Dallas tell much the same story. According to the Dallas Fed, the Austin area’s jobless rate dropped to a seasonally adjusted 5 percent in December — the lowest it has been since October 2008, before the recession.

Texas as a whole posted a seasonally adjusted jobless rate of 6 percent in December, the commission said. The national rate was 6.7 percent, according to the U.S. Bureau of Labor Statistics.

All told, Austin-area employers added 900 jobs in December, an essentially flat rate of growth that’s typical for the month, according to commission data. As usual for December, public-sector job cuts countered gains in holiday-related hiring at local retailers, restaurants and bars.

“The good news is we had 2,000 fewer people unemployed around the holidays than we did in November,” said Drew Scheberle, vice president of education and workforce development at the Greater Austin Chamber of Commerce.

In fact, the underlying employment data suggest that Austin’s labor market has more than kept pace with the influx of new residents and is pulling more existing residents into jobs.

The number of Austin-area residents working or looking for work increased by about 23,800 people last year, a rise of 2.5 percent, according to commission data. Yet that labor force growth was outstripped by the increase in the number of employed residents, which grew by 27,600 people, or 3 percent.

The chamber expects Central Texas residents “will have a lot of quality job opportunities” in the coming year, Scheberle said, “especially those with management experience, medical degrees and those who have computer programming, network and database skills.”

The types of employers interested in those skills went on hiring sprees last year. For example, firms in the professional, scientific and technical services industries, which employ many of Austin’s high-tech workers, added 7,900 jobs during 2013, an increase of 11.7 percent from the end of 2012.

Employers in the health care and social assistance industries added 2,000 jobs last year, an increase of 2.4 percent, the commission said. Those firms added 1,300 jobs in December alone — an unusual increase for a December but one that probably resulted from the month-to-month fluctuations common with workforce data.

Looking across the whole of the labor market in 2013, Austin saw fairly broad-based job creation. While the bulk of newly created jobs appeared in traditionally high- or low-wage industries, the area’s manufacturing and construction sectors showed signs of strength. All told, the goods-producing sector added 1,900 jobs during the year, a 2 percent increase.

While manufacturing payrolls remained fairly stable throughout the year, construction employment boomed, despite its minor seasonal dip in December. The mining, logging and construction sector, which in Austin is dominated by construction, added 2,000 jobs during the year, a 4.6 percent increase.

“It’s not surprising when you consider you have … nearly 18,000 apartments under construction in the region,” said Eldon Rude, principal of 360° Real Estate Analytics in Austin. “We started 9,000-plus new homes in 2013, and new office construction is increasing as well.”

Rude called last year’s job gains significant and said he expects payrolls to continue to grow in 2014, if at a more measured pace, as builders continue to catch up with demand for homes, apartments and offices.

Sprague, of Independence Title, agreed with Rude’s assessment. With a short supply of homes and increasing demand for commercial space in the area, he said, builders are having a harder time finding skilled workers, which is forcing them to increase wages.

With Austin’s population and labor market booming, Sprague said, most builders expect demand to remain high for the next couple of years.

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