KBTX Interviews Dennis Jansen on Economic Indicators & Texas Unemployment
Mar 31, 2021
Summary: Dennis Jansen spoke with KBTX about Texas’ higher unemployment rate, the state of the Oil and Natural Gas industry, and taxable sales in an interview that aired on Tuesday, March 30, 2021.
Information from the Private Enterprise Research Center’s latest Economic Indicators
report shows that Texas’ unemployment rate is higher than the national rate. Jansen explained, “The data is a bit mixed, but certainly the unemployment rate in Texas is, unusually, higher than the national rate. So, the Texas unemployment rate is 6.8% and nationally, it’s 6.2% - and that’s certainly not typical. Texas usually has a lower unemployment rate. If you look at the unemployment rate, you’d say, yes, Texas is falling behind a bit.”
A volatile Oil and Natural Gas industry has contributed to the higher unemployment rate. “Texas has been hit twice during this pandemic – we’ve not only faced the pandemic, but also the impact of declining oil and natural gas production… Certainly, Texas benefits substantially from oil and gas resources. Oil and gas is a high value-added activity. Employment in Mining, which is what The Bureau of Economic Analysis and other would call employment in oil and natural gas falls under Mining, … is about 1.4% of nonfarm employment in the Mining industry and that’s pretty small. The [Oil and Natural Gas] industry contributes the GDP of more like 5.1%, so we get a lot more value output from fewer workers in oil and gas – it’s high value-added and Texas does rely on that. I wouldn’t go far as to say that the price of oil is a necessity for the Texas economy, but it certainly helps a lot.”
For those in College Station-Bryan, the report also contained a silver lining – local real taxable sales increased 5.2% from December to January and were 0.4% higher than the same month last year. “There’s a fair amount of spending that’s going on even though people may or may not be employed. In a typical recession, when you’re unemployed, you cut your spending a fair amount, but in this recession, we’ve had a lot of government-direct payments to individuals, right? We’ve had now three rounds of relief payments, or some people call them stimulus payments, to individuals. And those have been quite substantial. So, even the unemployed have been able to maintain spending levels with those additional funds.”
To see the full interview on KBTX, click here
Read the March issue of Economic Indicators
in PERC’s publication library.