The state’s unemployment rate jumped in March as Texas employers cut jobs for the first time in nearly three years, reflecting mass business closures that began last month to slow the spread of the coronavirus.
The unemployment rate increased by more than a point, climbing to 4.7 percent from 3.5 percent in February, the Texas Workforce Commission reported Friday. Employers shed a net 51,000 jobs, the first monthly job loss since July 2017.
In the Houston metro area, employers cut 18,200 jobs in March, the biggest monthly job loss since the spring of 2009, when the Great Recession was heading toward its bottom. The region’s unemployment rate increased to 5.1 percent, from 3.7 percent a year earlier.
The figures represent the first look at the economic impact of major event cancellations throughout the state, which began the second week of March, and the subsequent stay-at-home orders implemented by local officials in response to COVID-19. Still, the employment data, based on surveys typically done around the middle of the month, don’t capture the scope of economic damage done by the COVID-19 outbreak.
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Earlier this week, initial jobless claims in Texas increased by more than 270,000, bringing the total number of unemployment claims in the state over the last four weeks to more than 1 million.
That represents just under 10 percent of the state’s labor force. Even so, the figure is likely understated as many have been unable to file claims due to website and phone backlogs.
The Houston metro region represents about a third of the jobless claims filed in Texas.
The state’s mining and logging sector, which in Texas is heavily dominated by the oil and gas industry, shed 2,200 jobs last month. The sector lost more than 20,000 jobs over the year. In Houston, employment in the mining and logging sector decreased 5.5 percent from last year, with a loss of 4,400 jobs from the same month of 2019.
The U.S. energy sector is struggling amid an oil bust that has pushed oil prices below $20 per barrel as the global pandemic has led to an unprecedented plunge in demand. Oil settled at $18.27 a barrel in New York Friday.
While OPEC and its allies have pledged to reduce output by 10 million barrels a day, the size of the cuts is hardly enough to offset the huge drops in demand as economies around the world shut down in order to slow the spread of the coronavirus. Some estimates put the drop in global oil demand at as much as 35 million barrels per day.