Texas' unemployment rate is the lowest it's been since July 2007, according to the state. Only 4.2 percent of Texans who were active participants in the workforce in March did not have jobs, down from 4.3 percent in February. March's state jobs report, issued Friday, was not all good news, however. For the first time in more than four years, Texas experienced net job loss. While it was seemingly inevitable that the state's economic momentum would at least slow, given the sustained lower oil prices that hit in summer 2014, less than 3,000 of the jobs lost in March were lost from the oil industry.
Dr. Bill Gilmer, Director of the Institute for Regional Forecasting at the C. T. Bauer College of Business at the University of Houston, said he was surprised the state's job numbers didn't reflect larger losses in the oil and gas industry. That could be attributed to a couple of things, he said. The numbers could simply be wrong -- they're sometimes corrected drastically when the final version comes out a year leader -- or oil companies could be shedding jobs in a way that wouldn't show up in the unemployment rate.
During the post housing bubble recession in 2009 and 2010, Gilmer said, the oil industry did let go of young talent -- it hoarded it. Instead, the recession was reflected in aging employees getting pushed out with retirement packages, which could be happening now as well, Gilmer said.
While no one is predicting disaster for the Texas economy -- major construction projects in the state's biggest cities serve as a buffer against that happening, Gilmer said -- as long as oil prices stay down, the state will continue to feel the brunt of those decreased profits.
"There's considerable certainty that we're going to see a major decline in oil field activity," Gilmer said.
If you like this story, consider signing up for our email newsletters.
SHOW ME HOW
You have successfully signed up for your selected newsletter(s) - please keep an eye on your mailbox, we're movin' in!
Each rig that shuts down results in about 250 jobs being lost, he said.
"It's going to a major event, we're going to feel it," Gilmer said before adding that if there was any time for the downturn to happen, now's not bad because of the improvement of the United States' economy as a whole.
Texas Governor Greg Abbott used the disappointing report as another opportunity to call for lower taxes and less regulation of business.
"While the State of Texas has achieved enormous success in creating jobs and spurring economic growth, it's time to renew our focus on promoting smarter tax policies that energize our economy and empower entrepreneurs to reinvest their capital in the Lone Star State," he said in a statement. "We must do more to keep government small, taxes low and promote reasonable regulations. And by diversifying our state's economy, Texas can - and will - remain the beacon of economic opportunity for the nation."