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Texas adds jobs in November, oil and gas shows improvement

State sees eighth consecutive month of employment gains in November

By Updated
Apache Corporation, pump jacks in the Adair San Andreas Unit, Welch, TX.
Apache Corporation, pump jacks in the Adair San Andreas Unit, Welch, TX.Courtesy/Jim Blecha

The Texas and Houston economies continued to improve last month, adding jobs at slow but steady pace as the oil industry stabilizes after a two-year downturn.

The state added nearly 21,000 jobs in November, the eighth consecutive month of employment gains, while the unemployment rate slipped to 4.6 percent from 4.7 percent in October, the Texas Workforce Commission reported Friday. Employment in mining and logging, the sector that includes oil and gas extraction and services, increased jobs for the second consecutive month, adding 3,200 jobs in November after adding 500 in October.

More Information

November

snapshot

21,000 Texas jobs added in November.

4.6% State unemployment rate.

16,000 Houston jobs added over past year.

4.9% Houston unemployment rate.

In Houston, employment growth maintained its slow pace, according to the U.S. Labor Department. The metropolitan economy created about 16,000 jobs over the past year, a growth rate of about a half-percent, about the same as October. The area's unemployment rate, which is not adjusted for seasonal variations, was 4.9 percent in November, up from 4.8 percent a year ago.

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"This is one more brick in the wall of keeping us from having negative year-over-year job growth at any point throughout this downturn," said Parker Harvey, regional economist with Gulf Coast Workforce Solutions.

The steady job growth in November is the latest indicator showing that Houston is shaking off the worst of the oil bust and beginning a broad recovery. Oil has moved past $50 a barrel, following agreements by major global producers to cut output, while the number of operating oil and gas rigs continues to climb. U.S. drillers put 13 more rigs into operation last week, the fifth consecutive week of increases, the Houston oilfield services company Baker Hughes reported Friday.

Earlier this week, the Houston Association of Realtors reported November's single-family home sales increased nearly 23 percent from a year ago, the biggest jump since July 2013. The Institute for Supply Management-Houston also reported this week that its index of regional production showed the local economy in November expanded for the second consecutive month.

Economists expect the growth to continue next year. In a forecast last week, the Greater Houston Partnership projected the metro area will add nearly 30,000 jobs in 2017, roughly double the number it gained last year, but far below the gains during the boom years between 2011 and 2014, when employment growth averaged about 100,000 jobs a year.

"The worst of the downturn is over, but our legs are still quite wobbly," said Patrick Jankowski, senior vice president of research for the Greater Houston Partnership. "We need to get some strength underneath us before we start to see stronger growth on a monthly basis."

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How fast the local economy grows will largely depend on the recovery of the oil industry, economists said. The partnership's forecast doesn't anticipate a sustained recovery for Houston's oil and gas industry until oil prices top $60 a barrel. Oil settled at $51.90 a barrel in New York on Friday.

In Houston, where executives of major energy companies have declared the worst of the downturn over, job losses have slowed. The mining and logging sector posted a year-over-year decline of 7,900 jobs in November, compared to 8,400 in October and 10,200 in September.

In a forecast for Texas released Friday, Wells Fargo Securities, a unit of the San Francisco bank Wells Fargo & Co., projected a modest rise in crude oil prices next year driven in part by the OPEC agreement to cut production by more than 1 million barrels a day. That will likely result in a ramp up in drilling at sites that can operate profitably in that price range, it noted.

Mark Vitner, managing director and senior economist at the bank, said he also expects to see investments in pipeline infrastructure and refinery expansions in the coming years. "The Texas energy sector is going to be a source of growth for a long time," he said.

Other areas of Houston's labor market have posted solid gains over the past year. The leisure and hospitality sector, which includes restaurants and hotels, has added 16,700 jobs from November 2015, a 5.4 percent annual increase. Employment in educational and health services, which includes universities and hospitals, grew by 14,500 jobs, a 3.9 percent increase.

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Trade, transportation and utilities, which includes retail, added 10,500 jobs from a year ago, an increase of nearly 2 percent. Such a boost is typical during the holiday season, when retailers and logistics companies add temporary workers to meet higher demand.

Statewide, the leisure and hospitality sector drove much of the overall growth with 5,700 added jobs last month. Employment in education and health services increased by 4,700 jobs in November.

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Katherine Blunt joined the Houston Chronicle's business desk in August 2016 and now covers refining, petrochemicals and LNG. Before joining the Chronicle, she covered transportation for the San Antonio Express-News. There, she wrote about infrastructure funding, urban planning and transit development. She also unraveled the murky investment structure underpinning the first public-private toll road in Texas. She grew up in Maryland and attended Elon University, where she majored in journalism and history.