Local unemployment rate remains low

A series of layoffs have hit the Austin metro in recent months — including the biggest cut ever from a local employer — but there remains little evidence of it yet in the region's unemployment figures.

The local jobless rate came in at 3.2% in May, up only slightly from 3% in April and still below its 3.4% rate in January, according to figures from the Texas Workforce Commission that haven't been adjusted for seasonal factors.

An unemployment rate of between 3% and 3.5% is within what economists consider "full employment," where most people who want a job have one. In addition, the Austin metro's unemployment rate continues to be lower than the U.S. figure, which came in at an unadjusted 3.7% in May, and the statewide figure, which came in at 3.8%, as well as the rates in the San Antonio, Dallas and Houston metros, which ranged from 3.5% to 4%.

The figure for the Austin area “is still so good by other standards around the state and around the country (that) it's hard to get upset about" the small increase from April, said Dirk Mateer, an economist and University of Texas professor.

Mateer said he thinks it's likely the local unemployment rate will continue to rise, possibly approaching 4% in the next six months or so. The region hasn't had an unemployment rate above 3.9% since the summer of 2021 as it was recovering from the pandemic.

"I think we are on the move toward 4%, but that's not a horrible number by any means," Mateer said. "It's just not out-of-the-ballpark fantastic, like Austin has been for so long."

Any weakening of the job market would be good news for corporate recruiters, many of whom complain about not having enough qualified applicants for posted jobs.

But it's still possible the local unemployment rate might not rise from its current level because of the region's strong economy and tight labor market, Mateer said, which could result in people impacted by recent jobs cuts quickly finding work elsewhere.

The Austin metro has suffered a series of job cuts in recent months, headlined by the?nearly 2,700 workers?let go at?Tesla Inc.'s Travis County factory in mid-April —?constituting the?biggest single round of layoffs in the area in at least four decades. Other recent layoffs include Charter Communications Inc.'s decision to shutter its North Austin call center and eliminate 230 positions , as well as job cuts by companies such as streaming viral-video startup Atmosphere, game maker Arkane Studios, Expedia , Rooster Teeth and job search company Indeed Inc.

Mateer said layoffs can take time to show up in unemployment statistics. Overall, he added, the local economy is strong and that continues to be its reputation regionally and nationally.

“That is the psychological part of this, and it is a huge piece of the economic puzzle" if employers pull back because they think there's a slowdown and workers start to look for jobs elsewhere, he said. "But I don't see that happening. I don't think we have had a fundamental change in the outlook for Austin."