Midland leads Texas with 2.3% unemployment, but energy shedding jobs

Texas could lose 125,000 energy jobs in 2015

The most recent jobs data shows the Midland and Odessa area leading Texas employment creation, but storm clouds are on the horizon as the oil and gas sector begins laying off workers because of falling oil prices.

A steep decline in drilling activity will result in fewer energy service jobs.

According to the Texas Workforce Commission, the Midland Metropolitan Statistical Area (MSA) had the lowest January unemployment rate in the state at 2.6 per cent. The Odessa MSA and the Amarillo MSA followed, each at 3.3 per cent, not seasonally adjusted.

Statewide, the Texas job market began 2015 with the continued positive momentum in job growth from the previous year, adding 20,100 seasonally adjusted non-farm jobs in Jan., for a total increase of 392,900 jobs over the year. The state’s seasonally adjusted unemployment rate fell to 4.4 per cent in the first month of 2015, down from 4.6 per cent in Dec.

“We are pleased to see that the growth of jobs in our state is continuing,” said Texas Workforce Commission Chairman Andres Alcantar. “Texas employers added 20,100 jobs including growth in nine of 11 major industries in January, which is a great testament to the strength and resilience of our economy and labor market.”

The Trade, Transportation and Utilities industry showed the greatest gains in January with 10,900 jobs added for a total increase of 79,100 jobs over the year.

“The diversity of skills found in the Texas workforce has contributed greatly to the strength of the Texas economy,” said TWC Commissioner Representing Labor Ronny Congleton. “As jobs are added, Texas has skilled workers to fill them and resources available for workers to obtain new skills when needed. I encourage all job seekers to look for available positions through TWC’s online job-matching resource, WorkInTexas.com and to take advantage of the many services and training resources available through their local Workforce Solutions office.”

Other major industries that made notable job gains in January included Professional and Business Services with 4,800 positions added; Information, which grew by 3,600 jobs; and Leisure and Hospitality, which added 1,800 jobs.

“This latest labor market data indicates that our state is approaching the 12 million jobs milestone, with 11,769,600 jobs now in Texas,” said TWC Commissioner Representing Employers Hope Andrade. “Employers continue to propel Texas on a path paved with growth and innovation.”

Continued low oil prices, however, could cost Texas up to 125,000 energy jobs, according to the Dallas Federal Reserve Bank.

Texas job growth will likely slow from about 3.6 percent in 2014 to between 2 and 2.5 percent in 2015, said Keith Phillips, Reserve Bank senior economist and research officer . That equates to about 235,000 to 295,000 new jobs in Texas in 2015, down from an estimated 408,000 jobs created in 2014.

“The sharp decline in oil prices has created much uncertainty in our outlook for state job growth this year, but we’re viewing it as a headwind for the Texas economy,” Phillips said. “However, Texas has a diversified economy, and while the drop in oil prices slows job growth, it won’t send the state into a recession like it did in the 1980s.”

Sustained oil prices of $50 a barrel or lower will sharply curtail drilling and extraction in the state, Phillips said. This will negatively affect parts of Texas that are more dependent on energy production, including the Permian Basin in West Texas and the Eagle Ford Shale in South Texas.

Job growth in the Houston region—which has a large share of energy-related jobs—will slow significantly but remain positive in 2015, he added.

Slowing exports may be another headwind for the Texas economy in 2015, according to Phillips. Texas exports have declined in recent months, and a strong U.S. dollar may further dampen exports this year.