unemployment

Texas Jobs Decline at Historic Pace Due to COVID-19, But There Are Signs of Recovery

The Federal Reserve Bank of Dallas predicts an 8.9% unemployment rate at the end of 2020 after the unemployment rate jumped to 12.8% in April

unemployment

In March and April, payroll enrollment fell 9.6% for a loss of 1.25 million jobs due to the impact of the COVID-19 pandemic, according to Anil Kumar and Judy Teng of Federal Reserve Bank of Dallas.

The Texas unemployment rate rose from 3.5 percent in February to 12.8 percent in April. The job loss affected industries across the board but hit the leisure and hospitality sector hardest at a 37.2% dip, or 530,000 jobs.

The steepest drops in employment came in major metro areas, particularly in El Paso, Fort Worth and Austin, followed closely by San Antonio, Houston and Dallas.

Job losses in the Lone Star State, however, were slightly less severe than in the entire nation, according to Kumar and Teng.

Initial claims filed for regular state unemployment programs fell 30% lower than the prior week on June 6. But despite recent declines in weekly initial claims, 1.25 million Texans still received state jobless benefits at the end of May, suggesting that the unemployment rate will remain elevated.

According to the Texas Business Outlook Surveys, overall business activity in Texas declined further in May but at a slower rate than the historic drop in April.

While the state unemployment rate is likely to remain elevated, there are signs of an emerging recovery, according to Kumar.

"The Texas Business Outlooks Surveys point to signs of an emerging recovery as perceptions of broader business conditions turn less pessimistic in May and indexes of future activity rebounded into positive territory," he said.

The Federal Reserve Bank predicted that the unemployment rate would end the 2020 year at 8.9% based on recent data.

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