Houston Texas Employment Still Mixed Despite Narratives To The Contrary

[(Otto Mation)]

KATY (AaronLayman.com) – Benchmark revisions to employment figures from the Texas Workforce Commission show that Houston added 16,700 jobs in February 2017. The latest figures show that Houston has added 19,300 jobs over the previous 12 months. It would appear the employment sector in Houston is rebounding from the recent downturn. The Greater Houston Partnership and their economic-development-oriented staff claim the revised employment data show that “the worst is over”. I’m not so sure. It’s important to keep in mind the narrative they need to sell. That narrative of endless growth comes with a number of conflicts attached.

Readers of my blog know that I look at the numbers for what they are. The glass is neither half full nor half empty. The water level is the water level. How you choose to interpret the data is your choice. I think it’s way too early to say Houston is out of the woods, regardless of the “narratives” (see permalink title) the Greater Houston Partnership is advertising. While employment has started the year on the right foot, the quality of jobs being added in Houston still looks very poor. We’ll get more insight into first-quarter wage data in a few months. Until then we can focus on what we do know.

After over two years Houston is still 5400 jobs below the previous employment peak. That should speak volumes. The fact that the GHP isn’t mentioning this inconvenient statistic is another clue of the narrative they are selling. Even with the increase in employment last month, the Houston unemployment rate edged up to 5.9 percent in February.

We have added jobs during the past few months, but not enough to keep pace with population growth. While job growth for 2016 was revised slightly higher, the TWC’s annual revisions show that Houston job growth in 2015 was much weaker than previously thought, now reported as zero percent employment growth.

Real estate sales in Houston are still holding up very well despite abundant headwinds. We can be thankful for that, but we should also be aware of the abnormally large influence of investors who have supported sales volume and prices.

Automobile sales in Houston started the year down 20 percent. This comes after what can only be described as a horrible collapse in auto sales in 2016 providing for an easy comparison. The collapse in Houston auto sales is likely indicative of a nationally saturated car market and locally weak demand.

Looking at year-over-year job growth in Houston, the recent uptrend is encouraging. The real question remaining is whether the trend is sustainable. Is this a brief bounce within an otherwise declining/stagnating economy, or a new growth pattern that will continue forward. 8 years into the larger economic cycle, history suggests the former and not the latter. We should not forget there are a number of asset bubbles yet to be resolved. No matter how hard they try, the Fed cannot print a sustainable economic recovery.

Goods producing employment in Houston is still far below levels seen in 2014.

Construction employment in Houston has tapered off now that the multi-family construction boom is over.

 

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