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Metro Houston created 3,600 jobs in December, according to the Texas Workforce Commission (TWC). That’s one of the weakest Decembers on record. In a non-recession year, the region typically adds 6,000 to 16,000 jobs during the month, with the average being around 9,300.
December’s report underscores that economic growth in Houston has slowed considerably in recent months. Existing home sales, cargo traffic, sales tax collections, and manufacturing activity have all slipped from their post-pandemic highs. December’s jobs data nudged gains for ’23 to 70,100 jobs, well below what the region created in ’21 and ’22, which were record years for Houston.
For the past two decades, a rule of thumb held that when oil prices were stable and the U.S. economy was growing, the region should average 60,000 net new jobs per year. However, Houston has grown significantly since then. The region’s gross domestic product now tops $633 billion and its population exceeds 7.3 million. The rule of thumb needs to be adjusted to roughly 70,000 jobs per year during the expansion phase of the U.S. business cycle. Houston’s employment gains for ’23 suggest the economy has returned to that normal, sustainable pace of growth.
Job gains for ’23 reflect the accuracy of the Partnership’s projections for the year. If the nation endured a mild recession, which last year many economists saw as inevitable, the forecast called for the region to create 60,800 jobs. If the nation avoided a recession, which the Partnership saw as a more likely scenario, the region would create 79,200 jobs. December’s jobs report split the difference, with Houston creating 70,100 jobs.
The monthly jobs data reported by TWC are preliminary estimates based on surveys of employers that TWC conducts throughout the year. As with any survey, the results are subject to sampling, non-response, structural, interpretation, and other errors. TWC is currently adjusting those estimates by comparing its survey data with unemployment insurance tax records that all employers must file. In March ’24, TWC will issue its annual benchmark revisions to the data. Only then will we know exactly how strong job growth was in ’23.
Prepared by Greater Houston Partnership Research
Patrick Jankowski, CERP
Senior Vice President, Research
Associate Analyst, Research
Metro Houston added 3,600 jobs in December '23
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