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Metro Houston’s unemployment rate fell sharply to 4.6 percent in September from 5.1 percent in August. The seasonal decline was larger than usual, bringing the rate below last September’s 4.8 percent. Houston’s rate remains above Texas at 4.3 percent and the U.S. at 4.0 percent, partly because the region’s faster-growing labor force is adding job seekers more quickly than employers can absorb them. Meanwhile, initial unemployment claims have fallen to their lowest level since the start of ’25, pointing to limited layoff activity.

Across the Houston area, unemployment varied widely by city. Among the 18 Houston-area cities where data are reported, unemployment rates ranged from 4.0 percent to 6.5 percent. Nine cities posted rates below the metro average: Alvin, Conroe, Friendswood, Fulshear, Galveston, League City, Pearland, Rosenberg, and Sugar Land. Houston matched the metro average at 4.6 percent. The remaining eight cities, Baytown, Deer Park, Katy, La Porte, Lake Jackson, Missouri City, Pasadena, and Texas City, reported higher unemployment rates.

Initial unemployment claims in metro Houston have continued to decline, with the four-week moving average falling to 3,298 in early October. That marks a 27 percent drop from a recent peak of 4,520 in late May and the lowest reading since January ’25. Claims are now running comfortably below post-pandemic norms, suggesting employers remain reluctant to shed workers even as hiring remains cautious.

Prepared by Greater Houston Partnership Research Division.

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