HOUSTON-THE WOODLANDS-SUGAR LAND METROPOLITAN STATISTICAL AREA (H-W-S MSA) Visit our website at

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1 Labor Market Information SEPTEMBER 2015 Employment Data HOUSTON-THE WOODLANDS-SUGAR LAND METROPOLITAN STATISTICAL AREA () Visit our website at THE RATE OF UNEMPLOYMENT IN THE WAS UNCHANGED IN SEPTEMBER AT 4.6 PERCENT. The number of people employed has decreased over the year but so has the number of unemployed helping drive the rate of unemployment down by one-half of a percentage point from one year earlier. The rate of unemployment for Texas was also unchanged in September at 4.4 percent while that national rate dropped three-tenths of a percentage point to 4.9 percent. Unemployment Rate (Actual) SEP 2015 AUG 2015 SEP 2014 Civilian Labor Force 3,234,352 3,235,756 3,272,494 Total Employed 3,084,997 3,086,526 3,117,852 Unemployed 149, , ,642 Unemployment Rate 4.6% 4.6% 4.7% Figure 1. Rate of Unemployment - Actual Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep Texas THE EXPERIENCED A NET INCREASE OF 6,400 JOBS IN SEPTEMBER FOLLOWING A MONTH OF MIXED PAYROLL CHANGES. The 0.2 percent September increase was the weakest on record since Job gains were made possible by growth in Health and Social Services and seasonal gains at public and private educational institutions. Most industry sectors with ties to energy suffered declines in September but surprisingly the Mining and Logging super sector reported an increase of 200 jobs. In addition to September s increase in Mining and Logging, August estimates were revised to reflect an increase of 800 jobs as opposed to the originally estimated loss of 500 jobs. Leisure and Hospitality also experienced a seasonal loss in September that was much higher than normal holding job gains to a minimum. 1

2 PAYROLLS IN THE WERE UP 36,200 JOBS OVER THE YEAR WITH THE PACE OF JOB GROWTH FALLING TO 1.2 PERCENT, MUCH WEAKER THAN A 3.7 PERCENT INCREASE ONE YEAR EARLIER. Strongest over-the-year job growth has been in population driven sectors of the economy such as Leisure & Hospitality and Educational & Health Services. A number of industry sectors were reporting over-the-year losses. Deepest declines have been in Manufacturing, down 12,300 jobs or 4.8 percent, and Financial Activities, down 4,800 jobs or 3.2 percent. Detailed data can be viewed on pages 8 & 9. Additional comments by super sector can be found beginning on page % 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% -5.0% -6.0% Peak 2.4% Losses not quite as steep in the Figure 2. Current Employment Statistics Actual Over-The-Year Increase/Decrease Most Recent Peak 4.6% Growth Rate 1.2% in September Growth Rate 1.9% in September Figure 3. Total Non-farm Employment-Actual Total Nonagricultural Employment 3,100,000 3,000,000 2,900,000 2,800,000 2,700,000 2,600,000 2,500,000 2,400,000 2,300,000 2,200,000 2,100,000 Employment Peaks November 2007 Recession Ends June 2009 Recession Begins December 2007 Employment Peaks December2008 and Trough January 2010 Recovers All Jobs Lost During the Recession by November ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000,000 2

3 Seasonally adjusted data for the and seen in figure 4 provides an additional view of employment removing the erratic seasonal movement. Seasonally adjusted job growth in the H- W-S MSA remained strong until early 2015 but has since stalled. The pace of job growth at the national level surpassed that of the in May, currently up 2.1 percent over the year compared to the s increase of 1.2 percent. Figure 4. Total Non-farm Employment-Seasonally Adjusted 3,200,000 Employment Peaks January 2008 Recovers All Jobs Lost During the Recession by November ,000,000 Total Nonagricultural Employment 3,000,000 2,800,000 2,600,000 2,400,000 2,200,000 Recession Begins December 2007 Employment Peaks August 2008 Recession Ends June 2009 H-W-S Employment Trough December 2009 Employment Trough February 2010 September 2015 Down 4,600 Over the Month Up 1.2% Over the Year Up 12.7% Above Pre- Recession High Up 142,000 Overthe Month Up 2.1% Over the Year Up 2.8% Above Pre-Recession High 140,000, ,000, ,000, ,000,000 2,000, ,000,000 DETAILS BY SUPER SECTOR August estimates for Mining and Logging were revised indicating an increase of 800 jobs over the month as opposed to the originally estimated loss of 500 jobs. The super sector also experienced an increase in September, up 200 jobs. A gain of 700 jobs in Support Activities for Mining was responsible for the increase. The super sector as a whole was down 200 jobs over the year. Support Activities for Mining, where most oilfield jobs are found, suffered a loss of 1,400 jobs over the year, down 2.5 percent. Oil and Gas Extraction was still reporting a slight increase of 100 jobs. The Mining and Logging super sector reduced payrolls by 11,900 jobs (-13.6%) over a thirteen month period after drilling activity collapsed during the Great Recession. Declines in the super sector have not been as deep during the current collapse in drilling activity with payrolls bottoming out at 108,100 in May, down 7,400 jobs (-6.4%) or roughly half as much as during the Great Recession, see figure 5. The average rig count was 848 in September, down 35 from August and 1,082 (62.5%) from one year earlier. The average Texas rig count was 367 in September, down 18 from August and 535 (59.3%) from one year earlier. With continued low drilling activity and WTI oil prices under $50 per barrel the probability for additional declines in the super sector are high for the near future. 3

4 Figure 5. Mining and Logging 120, ,000 Mining and Logging September ,014 Total Rig Count September ,925 December ,500 2,100 1, ,000 May ,100 1,700 90,000 80,000 70,000 October ,400 November ,500 Loss of 7,400 Jobs Over 5 Months Followed by Four Consecutive Months of Increases 1,500 1,300 1,100 60,000 50,000 Loss of 11,900 Jobs Over 13 Months June September ,000 Jan-05 Sep-05 Jan-06 Sep-06 Jan-07 Sep-07 Jan-08 Sep-08 Jan-09 Sep-09 Jan-10 Sep-10 Jan-11 Sep-11 Jan-12 Sep-12 Jan-13 Sep-13 Jan-14 Sep-14 Jan-15 Sep Construction increased payrolls by 700 jobs in September. Additionally, August estimates for Construction were revised reflecting an increase of 1,200 jobs over the month as opposed to a loss of 500 jobs making this the second consecutive increase. Gains over the last two months have been in Heavy and Civil Engineering Construction and Specialty Trade Contractors while Construction of buildings has suffered losses. Construction has lost 3,300 jobs over the year, down 1.6 percent. Most of the loss has been in Construction of Buildings where payrolls were down 3,600 jobs or 6.3 percent with losses also found in Heavy and Civil Engineering Construction, down 1,600 jobs or 3.4 percent. Specialty Trade Contractors was still reporting an increase of 1,900 jobs, up 1.8 percent over the year. Manufacturing was down 1,900 jobs in September. Most of the decline was in durable goods manufacturing as manufacturers tied to oil and gas exploration and production reduced payrolls another 1,400 jobs or 0.8 percent. Nondurable goods manufacturers also reduced payrolls in September, down 500 jobs. Job losses continued to mount in Manufacturing with payrolls down 12,300 jobs or 4.8 percent over the year. All of the loss was in Durable Goods Manufacturing, down 13,100 jobs or 7.4 percent over the year. Nondurable Goods Manufacturing added 800 jobs over the year, up 1.0 percent. The job situation for Durable goods manufacturing is similar to that of Mining and Logging. Durable goods manufacturing reduced payrolls by 23,700 jobs (-14.7%) over a seventeen month period after drilling activity collapsed during the Great Recession. Declines in the super sector have not been as deep during the current collapse in drilling activity with payrolls down by 13,900 as of September (-7.8%) or roughly half as much as during the Great Recession, see figure 6. The Houston Purchasing Managers Index rose slightly from 47.3 in August to 47.6% in September. Any index below 50 generally indicates contraction near term. According to the Institute for Supply Management Houston, Inc. area supply chain leaders indicate economic activity in Houston s manufacturing sector contracted for the ninth consecutive month in September. 4

5 Figure 6. Durable Goods Manufacturing Durable Goods Mfg Total Rig Count 200, ,000 September ,014 September ,925 2,100 December ,500 1, ,000 August ,400 1,700 September , ,000 1, ,000 Loss of 23,700 Jobs Down 14.7% Over 17 Months January ,700 Loss of 13,900 Jobs Down 7.8% Over 9 Months 1, ,000 1,100 80,000 60,000 June September ,000 Jan-05 Sep-05 Jan-06 Sep-06 Jan-07 Sep-07 Jan-08 Sep-08 Jan-09 Sep-09 Jan-10 Sep-10 Jan-11 Sep-11 Jan-12 Sep-12 Jan-13 Sep-13 Jan-14 Sep-14 Jan-15 Sep Trade Transportation & Utilities reduced payrolls by 4,100 jobs in September. More than half of the loss was in Transportation, Warehousing, and Utilities, down 2,300 jobs or 1.7 percent, where export activity has been on the decline due to a weak global economy in conjunction with a strong dollar. Wholesale Trade suffered a loss for the fourth consecutive month, down 1,000 jobs or 0.6 percent. The pace of job growth in the super sector has fallen one full percentage point over the last two months to 1.0 percent, an increase of 5,800 jobs over the year. Retail Trade was responsible for the increase with payrolls up 11,300 jobs or 3.8 percent over the year. Strongest growth in the retail sector has been at Motor Vehicle and Parts Dealers and Building Material and Garden Equipment and Supplies Dealers. Job losses in Wholesale Trade continued to mount in September, down 3,000 jobs or 1.8 percent over the year, as did payrolls in Transportation, Warehousing, and Utilities, down 2,500 jobs or 1.9 percent over the year. Information was unchanged in September with payrolls up 2,100 jobs or 6.5 percent over the year. About half of the MSA s employment in information resides in telecommunications with the remainder found in newspaper and periodical publishing, software publishing, motion picture and sound recording, and data processing hosting and related services. Financial Activities reported a loss for the third consecutive month in September, down 400 jobs. Most of the loss was tied to declines in Credit Intermediation and Related Activities, down 300 jobs. The super sector was down 4,800 jobs or 3.2 percent over the year. Real Estate and Rental and Leasing experienced the deepest decline, down 3,400 jobs or 6.2 percent, followed by Credit Intermediation and Related Activities, down 2,300 jobs or 5.3 percent. Securities, Commodity Contracts, and Other Financial Investments continued to report a healthy increase of 800 jobs over the year, up 4.4 percent. 5

6 Figure 7. Houston-The Woodlands-Sugar Land MSA Annual Change September 2014 to September , % 18, % 11, % 9, % 2, % 3, % -0.2% % -3, % -3, % -2, % -4, % % -12,300 Professional and Business Services reported a loss of 6,500 jobs in September. While the super sector incurs a seasonal decline in September during most years, the 1.4 percent decline was the strongest since Declines were widespread across the super sector as businesses with ties to oil and gas exploration and production are forced to reduce payrolls. The pace of job growth in Professional and Business Services declined to 0.8 percent in September, an increase of 3,800 jobs. Strongest job growth has been in Accounting, Tax Preparation, Bookkeeping, and Payroll Services, up 1,200 jobs or 5.5 percent. Services to Buildings and Dwellings also reported a healthy increase of 1,600 jobs or 3.2 percent. The sectors most heavily impacted by the current slump in the energy industry have been Architectural, Engineering and Related Services, down 3.2 percent, Management of Companies and Enterprises (where holding companies, corporate, subsidiary, and regional managing offices are found), down 4.1 percent, and Employment Services (staffing firms), down 3.1 percent. Layoffs in Professional and Business Services are expected to continue in the up and coming months as businesses continue to restructure. Education and Health Services added 6,000 jobs over the month. Most of September s increase was in Health Care and Social Assistance, up 4,200 jobs o 1.3 percent. Educational Services was also up 1,800 jobs or 3.4 percent. Payrolls in the super sector were up 17,700 jobs over the year with the pace of job growth rising from 3.8 percent in August to 5.0 percent. All subsectors were reporting healthy over-the-year increases. Ambulatory Healthcare Services accounted for nearly half of the increase with payrolls up 7,090 jobs or 5.6 percent. Hospitals reported the strongest job growth, up 5,600 jobs or 7.1 percent over the year. 6

7 Leisure and Hospitality experienced a seasonal loss of 6,200 jobs in September. The 2.0 percent decline was the largest since Leisure and Hospitality was the fastest growing super sector in the with payrolls up 18,600 jobs or 6.5 percent over the year. While all subsectors were reporting increases, most of the new jobs are found in Food Services and Drinking Places, up 16,300 jobs or 7.0 percent. Population growth continues to drive demand in the Leisure and Hospitality super sector. Other Services reported a loss of 2,600 jobs in September, down 2.5 percent. Other Services includes, a number of various repair services (industrial equipment, mining machinery and equipment, and many others related to the oil and gas industry). Other establishments in this category include personal care services, dry cleaning and laundry services, and religious and social advocacy organizations. Government experienced a seasonal increase of 21,200 jobs in September as educational institutions increased payrolls for the new school year. The super sector was up 9,400 jobs or 2.5 percent over the year. Most of the increase has been in Local Government, up 9,200 jobs or 3.3 percent, driven by gains in Local Government Educational Services. 7

8 NONAGRICULTURAL EMPLOYMENT Month Change Year Change Houston-The Woodlands-Sugar Land MSA SEP 2015 Net Percent Net Percent Total Nonfarm 2,983,400 6, % 36, % Total Private 2,599,700-14, % 26, % Goods Producing 561,300-1, % -15, %.Mining and Logging 111, % %...Oil and Gas Extraction 54, % %...Support Activities for Mining 54, % -1, %.Construction 205, % -3, %..Construction of Buildings 53, % -3, %..Heavy and Civil Engineering Construction 45, % -1, %..Specialty Trade Contractors 105, % 1, %.Manufacturing 244,500-1, % -12, %..Durable Goods 163,600-1, % -13, %...Fabricated Metal Product Manufacturing 59, % -5, %...Machinery Manufacturing 56, % %...Agriculture, Construction, and Mining Machinery Manufacturing 40, % -1, %...Computer and Electronic Product Manufacturing 16, % %..Non-Durable Goods 80, % %...Petroleum and Coal Products Manufacturing 9, % %...Chemical Manufacturing 37, % % Service Providing 2,422,100 7, % 52, %.Private Service Providing 2,038,400-13, % 42, %..Trade, Transportation, and Utilities 605,100-4, % 5, %...Wholesale Trade 168,100-1, % -3, %...Merchant Wholesalers, Durable Goods 95, % -2, %...Professional and Commercial Equipment and Supplies Merchant Wholesale 12, % %...Merchant Wholesalers, Nondurable Goods 44, % -1, %...Retail Trade 305, % 11, %...Motor Vehicle and Parts Dealers 40, % 1, %...Building Material and Garden Equipment and Supplies Dealers 22, % 1, %...Food and Beverage Stores 63, % 1, %...Health and Personal Care Stores 18, % %...Clothing and Clothing Accessories Stores 27,800-1, % %...General Merchandise Stores 66, % 1, %...Department Stores 21, % %...Other General Merchandise Stores 44, % %...Transportation, Warehousing, and Utilities 132,000-2, % -2, %...Utilities 16, % %...Air Transportation 20, % %...Truck Transportation 26, % %...Pipeline Transportation 10, % %..Information 34, % 2, %...Telecommunications 15, % 0 0.0%..Financial Activities 144, % -4, %...Finance and Insurance 92, % -1, %...Credit Intermediation and Related Activities 41, % -2, %...Depository Credit Intermediation 27, % %...Securities, Commodity Contracts, and Other Financial Investments and Related Activities 18, % %...Insurance Carriers and Related Activities 31, % 0 0.0%...Real Estate and Rental and Leasing 51, % -3, % 8

9 NONAGRICULTURAL EMPLOYMENT Month Change Year Change Houston-The Woodlands-Sugar Land MSA SEP 2015 Net Percent Net Percent..Professional and Business Services 473,800-6, % 3, %...Professional, Scientific, and Technical Services 219,500-2, % 1, %...Legal Services 24, % %...Accounting, Tax Preparation, Bookkeeping, and Payroll Services 22, % 1, %...Architectural, Engineering, and Related Services 72, % -2, %...Computer Systems Design and Related Services 32, % %...Management of Companies and Enterprises 33, % -1, %...Administrative and Support and Waste Management and Remediation Services 221,300-3, % 3, %...Administrative and Support Services 209,200-4, % 2, %...Employment Services 80, % -2, %...Services to Buildings and Dwellings 51, % 1, %..Educational and Health Services 371,800 6, % 17, %...Educational Services 55,400 1, % 1, %...Health Care and Social Assistance 316,400 4, % 15, %...Ambulatory Health Care Services 150, % 7, %...Hospitals 84, % 5, %..Leisure and Hospitality 305,500-6, % 18, %...Arts, Entertainment, and Recreation 31,800-2, % 1, %...Accommodation and Food Services 273,700-4, % 17, %...Accommodation 26, % 1, %...Food Services and Drinking Places 247,600-3, % 16, %..Other Services 103,700-2, % % Government 383,700 21, % 9, %.Federal Government 27, % 0 0.0%.State Government 72,000 2, % %..State Government Educational Services 39,400 2, % %.Local Government 284,000 19, % 9, %..Local Government Educational Services 196,300 19, % 6, % UNEMPLOYMENT RATE SEP 2015 AUG 2015 SEP Texas (Actual) United States (Actual) Houston-The Woodlands-Sugar Land MSA: Includes Austin, Brazoria, Chambers, Ft. Bend, Galveston, Harris, Liberty, Montgomery, and Waller Counties. All Data is Subject To Revision. Sources: Department of Labor, BLS, Texas Workforce Commission, Institute for Supply Management, Baker Hughes Incorporated, Kiley Advisors, Metrostudy, and The Federal Reserve Bank of Dallas. 9