As the coronavirus crisis and Hurricane Laura collide in the Lone Star State, there’s finally some good news for Texans. New report shows that the state’s seasonally adjusted unemployment rate has dropped to 8% in July.
Texans have been facing challenge after challenge with the coronavirus continuing its spread across the state and more recently Hurricane Laura bringing life-threatening storm surge with it. Officials are trying to hold the situation in check, responding to Hurricane Laura while also maintaining all the safety measures imposed to mitigate the spread of the virus. It’s not the worst-case scenario, as there have been fewer Covid-19 cases registered in the past few days, and Hurricane Laura caused less damage than it was initially expected.
The state is still going through a difficult period, but there’s also good news on the horizon. In the middle of all this chaos, the unemployment rate continues to drop for the third month in a row, making officials feel a lot more optimistic about the future of the job market in Texas.
Unemployment in Texas below the national rate
Texas’ economy took a hit back in March 2020 when the coronavirus outbreak began. Experts warned there won’t be any improvement until the force of the pandemic starts to diminish, but it appears that Texas defies all predictions and fights hard to stay afloat.
The U.S. Bureau of Labor Statistics released a report showing that in the month of July, the state’s seasonally adjusted unemployment rate dropped to 8%, meaning Texas is below the national rate of 10.2%. Texas Workforce Commission Chairman Bryan Daniel considers this slight change as a sign of the underlying strength of Texans and the state’s economy. He also mentioned that the TWC’s goal remains enhancing skills and creating new career opportunities for residents across the state, in order to maintain Texas’s status as the best state to live and work in America.
31,400 jobs added to offset lost private sector positions
Things were going great in this respect for Texans last year when they experienced a near-record low of 3.5% in unemployment (July 2019). The coronavirus outbreak changed the course of events and steered Texas economy into a recession. The jobless rate reached a historic high in April (13.5%), putting a severe financial strain on the state’s economy.
But in recent months things took a turn for the better. In June 2020, 8.4% of Texans were unemployed and in July the numbers dropped to 8%, marking the third consecutive month of unemployment decrease and the lowest rate since March 2020. This might not be a major change, but it serves to show that financially Texas is going in the right direction.
The Texas Workforce Commission also added that almost 12.300 private sector positions were lost over the past month. In order to balance the situation, the Government sector added 43,700 jobs. Professional and Business Services strived to make up for the loss with 16,400 positions, while Education and Health Services brought their contribution with 10,300 positions.
TWC Commissioner Representing Labor Julian Alvarez has a very optimistic take on the situation, stating this improvement proves the strength of Texas’ workforce. He added there will be more funds and resources invested in programs such as Registered Apprenticeships, the Skills Development Fund or Skills Enhancement Initiative, meant to improve career prospects for those who want to enter or return to the labor market.
Unemployment claims at their lowest since March
When the coronavirus outbreak began and the virus started to spread across the US, there was a general consensus that the job market will be severely affected, but there was no telling to what extent. As things progressed, more and more employees were forced to lay workers off or furlough them indefinitely. As a result, a lot of people found themselves without an income and without the possibility to secure another job as most companies were no longer hiring.
This translated into major financial distress for those who were left with no source of revenue. For a lot of people, the only way to cover for basic expenses and make ends meet each month was to tap into their emergency savings (if they had one), hoping the situation will improve and the money will last until then, or apply for cash loans to help them get through this rough patch.
If we look at the numbers, there’s definitely hope for improvement. On 27th of August the Labor Department released data showing there were 52,318 first-time unemployment insurance claims recorded during the week ended August 22. The figures might still seem high, but there were 9,000 fewer unemployment claims registered compared to the previous week when over 61.000 workers filed for a claim. To put things into perspective, these are the lowest figures registered since late March and early April when safety measures due to the coronavirus pandemic sent people into lockdown and forced numerous businesses to cease activity.
Each week fewer Texans apply for unemployment claims, leading workers to believe the worst part of the pandemic might be over. But experts advise us to be cautious because we’re not out of the woods just yet. While the situation is getting better, the coronavirus pandemic is far from over and its effects won’t disappear overnight. The number of workers filing for unemployment is much higher than it was this time last year. The job market is nowhere near where it used to be (in 2019 there were only 700,000 unemployment claims registered for the whole year). As such, it’s best to adjust our expectations and not wait for miracles to happen.
For the moment, the authorities are confident that this positive trend is going to continue in the following months as well. The TWC will bring updates and release new jobs figures for the month of August on Friday, 18th of September 2020, so we’ll be able to see how things have evolved in the interim.