Texas Unemployment Rates Rise in All Texas MSAs

The unemployment rate increased between August and September in all 25 Texas metro areas according to yesterday’s release of labor area unemployment statistics by the Bureau of Labor Statistics.

The figure below depicts the August and September unemployment rates for all Texas MSAs. The solid portion of each bar shows the August values, the white portion shows September’s percentage point increase, and the bold numbers reflect the September unemployment rate. At 6% or below, Amarillo, College Station-Bryan, and Abilene have the three lowest September unemployment rates. Odessa, McAllen-Edinburg-Mission, and Beaumont-Port Arthur have the three highest rates at 12.7% or more. McAllen-Edinburg-Mission had the largest percentage point increase at 2.6%, while Texarkana had the lowest percentage point increase of 0.7%.


September also saw a statewide increase in the unemployment rate to 8.3%, up from 6.8% in August. The September rate in Texas was higher than the national rate of 7.9%, down from 8.4% in August. Texas was one of only 13 states with a higher unemployment rate in September than in August. Texas also had the 13th highest September unemployment rate.

The map below depicts the Texas MSA’s September unemployment rates. Hovering over an MSA brings up two figures. The upper figure presents the unemployment rate (yellow-left axis) along with the number of initial unemployment insurance claims as a percent of the MSA’s labor force (red-right axis). The seasonally adjusted monthly unemployment rates were highest in April and May and declined across the MSAs at varying rates through August. The September unemployment rate increases are also clearly seen in each MSA’s graph.

What has caused the increase in the unemployment rate across all Texas MSAs?

The second series in the top figure tracks initial unemployment claims at weekly intervals. Initial claims indicate new additions to the number of unemployed, though some newly unemployed workers do not file unemployment insurance claims. These data on initial claims are from the Texas Workforce Commission and are not seasonally adjusted. In the figure, initial unemployment insurance claims for each MSA are divided by that MSA’s monthly labor force. Initial claims have generally trended down in the MSAs since their peak in April. If initial claims are higher than the number of workers who find jobs, the number of unemployed rises. Conversely, if the initial claims are lower than the number of workers who leave unemployment then the number of unemployed declines. Given that initial claims have been declining over the last two months, the rise in the unemployment rate cannot be attributed directly to rising claims. Instead, unemployment increases must be due to a reduction in the number of unemployed workers finding jobs relative to those moving to unemployment status.

The number of seasonally adjusted unemployed workers statewide increased from 981,437 in August to 1,185,086 in September, while the labor force declined 1.1%, producing the higher September unemployment rate.

The second figure for each MSA depicts weekly active COVID-19 cases as a share of the population. These series begin with data for the week ending on April 11. Within each MSA, there is a negative relationship between initial unemployment insurance claims and active COVID-19 cases. However, over the past few weeks we have seen a significant upward trend in active cases in several MSAs, particularly in west and north Texas. To the degree that any new restrictions affect economic activities, initial claims will likely rise.

Interactive Figure Sources: Unemployment rate - Bureau of Labor Statistics, UI claims - Texas Workforce Commission. Active cases as a % of population - Texas Department of State Health Services for active cases and Census for 2019 population estimate.

Posted: October 29, 2020 by Dennis W. Jansen, Carlos I. Navarro, Andrew J. Rettenmaier