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Metro Houston’s unemployment rate rose to 5.2 percent in June from 4.6 percent in May, according to the Texas Workforce Commission (TWC). Rates also increased statewide and nationally, though Texas saw the sharper rise. Houston’s increase came despite healthy growth in payroll employment and fewer initial unemployment claims. More people entering the labor force explains part of the increase. A drop in estimated resident employment accounts for the rest, pointing to some softness that conflicts with other signs of strength. The rise bears watching but does not suggest a weak labor market on its own.

Across the Houston area, unemployment varied widely by city. Among the 18 Houston-area cities where data are reported, unemployment rates ranged from 4.5 percent to 7.7 percent. Eight cities posted rates below the metro average: Conroe, Friendswood, Fulshear, Galveston, League City, Pearland, Rosenberg, and Sugar Land. Houston’s unemployment rate matched the metro average at 5.2 percent. The remaining nine cities, Alvin, Baytown, Deer Park, Katy, La Porte, Lake Jackson, Missouri City, Pasadena, and Texas City, reported higher unemployment rates.

Initial unemployment claims have fallen since the end of May, with the four-week moving average dropping from 4,520 on the week of May 23rd to 3,948 on the week of July 4th. Claims are at their lowest rate since early January, suggesting that the rise in the unemployment rate is not driven by layoffs.

Prepared by Greater Houston Partnership Research Division.

Colin Baker
Director of Economic Research
Greater Houston Partnership
bakerc@houston.org