Houston’s higher unemployment rate reflects economic growth, experts say

HOUSTON, Texas (KTRK) — The latest national jobs report shows robust figures, but one group is still lagging behind, and the numbers might indicate higher borrowing costs for consumers.

Although Houston’s unemployment rate has been higher than the national average, this is not necessarily bad news.

For the past 2.5 years, the national unemployment rate has remained at 4% or lower, a trend that continued with Friday’s jobs report. The federal government highlighted that the labor market hasn’t seen such consistency in over 50 years. Locally, however, the situation has been different.

Houston’s unemployment rate has been above 4% for much of the past year. Economists attribute this to the improving performance of industries like oil and gas. Despite the higher local rate, experts suggest there’s no need for concern.

“It could be the fact that a lot of people are coming to Texas and looking for jobs,” said Jorge Barro, founder of Fiscal Insights. “It may sound counterintuitive, but that could just be a sign of the economic growth and opportunity that we have in the state of Texas.”

Here are the industries seeing the most hiring both locally and nationally:

The latest state jobs report indicates a surge in government jobs and construction jobs. Mining and logging, including oil and gas, are also performing well. Additionally, private education is generating numerous jobs.

Nationally, health care and government jobs are leading the latest report. Leisure, hospitality, and professional services are also strong sectors, perhaps even too strong.

Due to the high number of jobs and persistent high costs of goods, economists predict that borrowing costs may not decrease anytime soon.

“I think the Federal Reserve is going to interpret that as an opportunity to maintain higher interest rates and a reason to believe that the economy might be running just a little bit hotter than what would be consistent with a lower inflation rate,” Barro explained.

This primarily affects new purchases. If you already own a home or car with a fixed-rate loan, you’re likely locked in. Regarding local unemployment rates, certain areas show distinct trends.

Baytown and Pasadena have the highest unemployment rates, while Houston is in the middle. Friendswood and Pearland boast the lowest unemployment rates.

Teen unemployment remains high as the school year ends:

Teenagers continue to face high unemployment rates, with the latest report showing about 12%. The rate is approximately 11% for white teens and closer to 14% for Black teens.

Despite the end of the school year, opportunities for summer jobs are still available. Workforce Solutions has an $8 million grant to help teens secure paid internships.

“A lot of times we learn things in the classroom, but you’re actually able to apply those facts and knowledge when you have a job and use them in the real world,” said Workforce Solutions executive director Juliet Stipeche. “Then, you’re able to meet new people, explore new parts of town, and have money in your wallet.”

For more information about the paid internship program, visit any Workforce Solutions location or contact the hotline powered by Workforce Solutions at 713-243-6663.