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Job Growth Slows, but Unemployment Remains Low in the Second Quarter of ‘07 Job growth in San Antonio slipped to 2.27 percent (annualized) during the second Quarter of 2007, just below the 2.30 percent registered for the state of Texas for the same period. Despite the decline in job growth, however, San Antonio’s second Quarter unemployment rate dropped to a low 3.86 percent, the lowest registered for the region since the fourth Quarter of 2000, and well below Texas’ 4.12 percent during the Quarter.
San Antonio’s low unemployment rate has created a very favorable market for job seeker’s of late, increasing competition among area employers for skilled workers and talented employees. The slipping unemployment rate, however, is not wholly due to the influx of new jobs into the region; it is at least partly attributable to slower labor force growth in San Antonio than in other large metropolitan areas throughout the state and in Texas as a whole. San Antonio’s labor force expanded by 0.33 percent between the second Quarter of 2006 and the second Quarter of 2007. Contrastingly, the Austin-Round Rock metro expanded by 1.91 percent, while the Dallas-Fort Worth-Arlington metro and the Houston-Sugar Land-Baytown metro labor forces grew by 1.01 percent and 1.13 percent respectively during the time-span. Texas’ labor force, meanwhile, expanded by 0.59 percent during the same twelve-month period. In areas with slower labor force growth, more moderate job growth can exhaust the labor supply more quickly than areas with a rapidly growing workforce, driving down the unemployment rate – as is the case currently in San Antonio. Labor Force growth can be driven by either (1) an increase in the population or (2) an increase in the percentage of working age adults (age 16+) engaged in the workforce – currently employed or actively seeking employment. An analysis of Texas and its large metropolitan economies (2005, American Community Survey, www.census.gov ) suggests that a low labor force participation rate by working age adults (age 16+) is likely a contributing factor to the San Antonio region’s low unemployment rate (see chart below). Comparing
Large Texas Metro Areas…
The Austin-Round Rock metro area registered a low 3.39 percent unemployment during the Quarter, well below the state rate of 4.12 percent and lower than Texas’ other large metro areas. Contrastingly, the San Antonio metro’s unemployment rate of 3.86 percent remained lower than that of its counterparts (with the exception of Austin-Round Rock) and the state as a whole. The area’s low unemployment rate endured despite moderate regional job growth of 2.27 percent (annualized) during the Quarter - milder than job growth realized by San Antonio’s peers and lower than the state rate for the Quarter of 2.30 percent for the period.
The above diagram illustrates the comparative data provided in the above table relative to Texas’ four largest MSA (Metropolitan Statistical Area) economies. The sphere representing each MSA is scaled to reflect the aggregate size of each MSA’s average total Nonfarm payrolls for the second quarter of 2007. State and
National Unemployment Comparison…
For the same period, Texas’ seasonally adjusted unemployment rate registered slightly above its unadjusted rate at 4.16 percent, while the national rate posted at 4.48 percent.
San
Antonio Job Growth…
In contrast, annual job growth for San Antonio slipped to 2.27 percent (18,467 jobs) during the second Quarter. Though that rate of expansion exceeds the annual job growth realized by the area in four out of the last seven years, second Quarter annual growth approaching two-percent (2.27 percent) is characteristic of a trend of slowing job growth for San Antonio since the close of 2006. The Leisure & Hospitality sector experienced the most dramatic increase in employment during the second Quarter of 2007, expanding payrolls by 7,867 jobs (8.55 percent). Comparatively, annual job growth for the sector registered an impressive 3.31 percent (3,200 jobs), well above the 2.27 percent registered by the greater job market. Hiring among Food Services & Drinking Places employers, which added 2,333 jobs during the last twelve-months and 2,400 during the second Quarter alone, accounted for a large share of both the sector’s Quarterly and Annual gains.
The Professional & Business Services sector, meanwhile, posted the second largest job gains during the second Quarter, expanding payrolls by 2,433 jobs (2.29 percent). The sector’s strong Quarter of job growth brought its annual growth to 3,600 jobs (3.43 percent), making it the strongest performing sector in job market – in terms of aggregate job growth – during the twelve month period. Strong hiring among Employment Services employers, which include both temporary and professional placement firms, continued to catalyze growth in the sector. Employment Services payrolls grew by 2,200 jobs (8.64 percent) during the second Quarter, bringing its annual job growth to 2,933 jobs (11.86 percent) and making it the strongest performing industry in the job market in terms of both Quarterly and annual growth. The Trade, Transportation, & Utilities sector, likewise, added a significant number of jobs to the labor market during the second Quarter of 2007, growing payrolls by 1,067 (0.75 percent). In contrast, however, annual growth for the sector lingered well below that of the greater job market at 1.08 percent (1,533 jobs). Retailers proved to be both the driver of Quarterly growth and a major contributor to muted annual growth for the sector. Retailers accounted for the bulk of the sector’s Quarterly increase, adding 667 jobs (0.73 percent), while annual growth for the industry remained relatively flat at 0.29 percent (267 jobs).
The Financial Activities sector, meanwhile, continued its solid job growth into the second Quarter. The sector added 667 jobs (1.03 percent) during the three-month period, bringing its annual job growth total to 1,467 (2.29 percent). The Goods Producing segment of the job market, likewise, posted solid job growth during the second Quarter of 2007, adding 1,233 jobs (1.22 percent) in aggregate. The Construction sector accounted for the bulk of the Quarterly increase, padding payrolls by 767 jobs (1.59 percent). The Manufacturing sector, meanwhile, registered another impressive Quarter of growth, adding 400 additional jobs (0.81 percent). The resurgent Manufacturing sector, which has been an economic “bright spot” for the region over the past two years, also continued its recent trend of strong annualized job gains, growing payrolls by 3.25 percent (1,567 jobs) during the twelve-month period. Rounding out the Quarter’s expanding employment sectors, the Education & Health Services sector and Other Services sector posted gains of 167 jobs (0.15 percent) and 700 jobs (2.43 percent) respectively.
The Government sector, meanwhile, dropped a nominal 33 jobs during the second Quarter (-0.02 percent), while the long-contracting Information sector endured the only Quarterly and annual job losses in the job market. Employment in the Information sector slipped by 33 jobs (-0.17 percent) for the Quarter, bringing annual losses to a significant 467 jobs (-2.26 percent). Notes
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