The Texas economy continued a modest expansion in September according to the Dallas Federal Reserve. The state’s total employment rose by 1.7% in September even though hurricane related problem drove the state’s unemployment rate to 5.7% for September, up from 5.1% in August. Job growth continued across all sectors of the Texas economy with the exception of the information sector which continues to be dragged down by telecom.
The Dallas economy continues to be the weakest among the state’s metro areas with the telecom and airlines industries the main drag. The Dallas economy did pick up a bit in September with the Fed’s Business Cycle Index showing an up tick of 2.6% and with the financial and construction sectors boasting strong job growth. The Fort Worth side of the Metroplex is expanding at about the same pace as the state as a whole with strong job growth in hospitality and professional services.
The powerhouse of the state continues to be Houston. So far this year Houston has added over 20,000 jobs with gains in all economic sectors although it is the energy sector leading the charge. The Fed’s Business Cycle Index was a staggering 8.7% for September alone. The fallout from hurricanes Katrina and Rita is expected to be positive for the Bayou City.
The Lone Star laggard for September was Austin with a growth rate of only .5% after boasting a blistering pace for the first seven months. Still, Austin has added 15,000 jobs in 2005 which represents a far greater impact on the smaller Metro than Houston’s 20,000 jobs against that area’s population of over 5 million. Austin also saw a collapse of venture capital funding in the third quarter a factor that has a big impact in the Capitol City.
The tech sector continues to be a drag on the overall economy. According to the Texas Workforce Commission the third quarter saw the loss of another 2800 tech-related jobs for a year-to-date loss of 5000. All segments of the tech sector saw continuing job losses. These losses disproportionately affect the Dallas Metro area.