August 20, 2021
Texas employment grew at an annualized rate of 7.1 percent in July after rising 4.3 percent in June. Texas ’leading index declined for the first time since March, primarily due to rising initial unemployment insurance claims. However, the overall movement of the index over the last three months remains positive, suggesting positive growth over the next three to six months.
Using a downward model based on national forecasts, Texas COVID-19 hospitalizations, and oil futures prices, we estimate jobs will increase by 4.3% in 2021, below last month’s estimate of 5.6%, with a bandwidth of 80%. of percentage to 5.0 per cent. According to forecasts, this year 527,700 jobs will be added to the state and in December 2021 employment will be 12.9 million (Graph 1). Part of the downward revision of growth for 2021 was the result of an initial benchmark review of Texas employment growth in the first quarter of this year. The revision reduced our estimate of employment growth during the first three months of the year from 5.1% to 3.1% and reduced the growth estimate for the first half of the year from 4%. , 4% to 3.3%.
“Employment growth during the first part of the year, when COVID-19 cases were at very high levels, was weaker than previously estimated,” said Keith Phillips, deputy vice president of the Dallas Fed and senior economist. “The recent increase in COVID-19 hospitalizations in Texas and the forecast of continued high levels of hospitalizations at least through the end of September are putting some downward pressure on the forecast. Our business contacts report continued with strong demand, but with difficulties in expanding due to the lack of job seekers and bottlenecks in the supply chain.Contacts point out that the labor market has shrunk slightly since benefits federal unemployment ended in late June and they are also concerned that the labor market will remain tight, as rising COVID-19 cases may lead to hesitation among workers in high-contact industries and continue to have child care problems ”.
The Texas unemployment rate fell from 6.5% in June to 6.2% in July. With federal unemployment benefits ending in late June, labor force growth modestly improved in July to 3.1 percent, from 1.1 percent in June.
Texas ’leading index declined moderately in July, although six of the eight indicators contributed positively (Graph 2). The decline in the index focused on a significant increase in initial unemployment insurance claims in July, although a rise in the value of the weighted dollar in Texas trade also contributed negatively to the index. Earnings from the U.S. leading index, desired publicity, and permits to drill oil and gas wells were the strongest positive contributions. The average weekly hours worked in manufacturing, the price of shares of Texas-based companies and the price of oil were slightly positive signs.
Next version: September 17, 2021
The Dallas Fed’s Dallas employment forecast projects employment growth for the calendar year and is estimated as the 12-month change in payroll employment from December to December.
Due to the rapid onset of the COVID-19 pandemic, the prediction model used in this version of the Dallas Fed’s employment forecast differs from the model used historically. In this case, payroll employment is estimated based on U.S. GDP growth expectations for 2021, an estimate of the direct impacts of COVID-19 from March to May 2020, of planned hospitalizations in Texas for the COVID-19 Institute of Health Metrics and Assessment, and expected West Texas intermediate crude prices based on the futures curve.
For more information, see dallasfed.org/research/forecast/