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Austin's seasonally adjusted jobless rate drops to 14-year low

Austin American-Statesman (TX)

March 28 --January typically sends a chill through the Central Texas labor market. February comes along and warms it back up. And so it went this year.

But workforce economists like to have a better sense of the labor market's underlying consistency, absent those trends. So they perform some calculations to take out the effect seasonal hiring patterns.

Do that for February's workforce data, and the Austin metro area posted its lowest unemployment rate in almost 14 years.

Aided by a surge in job creation during the month, February's seasonally adjusted jobless rate dropped to 3.4 percent, its lowest mark since March 2001 , according to calculations compiled by the Federal Reserve Bank of Dallas .

The adjusted rate matched the unadjusted figure, which fell to 3.4 percent in February from 3.7 percent the prior month, according to data released Friday by the Texas Workforce Commission .

Statewide, the seasonally adjusted jobless rate declined to 4.3 percent in February -- its lowest point in seven years, according to the commission. It had been at 4.4 percent in January. The national rate fell to 5.5 percent from 5.7 percent.

Back in 2001, the local jobless rate didn't stay that low for long. By the end of the year, the dot-com bust had cut the legs out from under the region's high-tech sector. The adjusted jobless rate jumped to 5.7 percent that December and didn't come back down again until 2004.

"We must always guard against complacency, and we must continue to focus on the 36,000 who do not currently have jobs," said Drew Scheberle , senior vice president of education and talent development at the Greater Austin Chamber of Commerce .

While Central Texas still needs to help existing residents build more high-demand health care and technology skills, Scheberle said, it has built a much more diverse and stable industry and job base than it had back in 2001.

Absent a major economic shock, Austin probably won't see the same sort of rapid increase in joblessness these days as in the early 2000s. Even the nosedive in oil and gas prices -- a decline persistent enough that Dallas Fed economists recently scaled back their 2015 job-growth forecast for the state -- will have little effect on the Austin labor market, local workforce experts said.

" Houston and Dallas are going to have a little more of a fallout," said Craig Patterson , executive search manager at the Austin office of the Addison Group staffing agency. "In Austin , we're somewhat protected."

In fact, February brought yet another strong surge of payroll growth in Austin , the workforce commission said. Local employers added about 8,600 jobs in February, up 0.9 percent from the month before and 3 percent higher than February 2014 .

Federal government payrolls in the area jumped 9 percent as the Internal Revenue Service beefed up its ranks for the tax season. And hotels, restaurants and bars added more than 4,000 jobs as they ramped up for South by Southwest.

Even the new JW Marriott hotel downtown, which had already staffed up for its Feb. 13 opening, added about 50 more hires last month, General Manager Scott Blalock said.

"We had another job fair in February," he said, "even though we had several before opening."

While Austin's leisure and hospitality sector has boomed since the recession, the region has seen payrolls balloon across a wide range of industries. And that growth has helped absorb the area's population explosion.

This week, the Census Bureau said the metro area's population has reached 1.9 million residents -- and could top 2 million by next year.

More than 7,600 people joined the metro area's official labor force over the past 12 months, according to the commission's data for February. And in the same span, the number of employed Austin residents jumped by more than 19,000.

Yet for all the region's economic growth -- not to mention an unemployment rate that much of the country would kill for -- wages and household incomes have stagnated.

After adjusting for inflation, the metro area's median household income dropped almost 2 percent from 2009 to 2013, according to U.S. Census Bureau data.

In theory, wages rise as the labor market tightens and companies have to do more to entice workers. But in Austin , the stream of workers moving into the area -- including a large share of well-educated professionals -- is alleviating most of the upward wage pressure, said Patterson, the Addison Group manager.

Compensation has increased for employers seeking specific talents and skill sets, such as certain high-tech manufacturing or software skills, he said, but in many cases those offers have included boosted health care coverage or more paid time off instead of increasing wages.

Wages will probably stay fairly steady "as long as that flow (of people into Austin ) is bringing new businesses and new jobs," Patterson said. "But where is that break-even mark? In the next six months, will we be looking at a talent surplus?"


(c)2015 Austin American-Statesman, Texas

Visit Austin American-Statesman, Texas at www.statesman.com

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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