Houston job growth remains strong, but concerns grow for the coming year
HOUSTON - Amid talk of rising interest rates and a likely-recession, the Houston-area's job growth was stronger than expected in September.
The numbers' come from the Gulf Coast Workforce Solutions board, which finds the 13-county Houston region is up about 190,000, year over year, which is a September record. Despite the positive news, there are warnings on the horizon.
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Parker Harvey, who is the chief economist for the Gulf Coast Workforce Solutions says, "I'm cautiously optimistic that this will continue, but things are pointing toward them not continuing in the same trajectory, next year."
In September, the Houston region added a net 14,800 jobs in September, compared to a typical pre-pandemic gain of 5,900 jobs. It continues an above-average job gain for every month this year.
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Service and hospitality jobs continue to help drive the growth, as do trucking, transportation and warehouse work, which have done well over the year as part of the effort to meet supply chain needs. Along with public education and government jobs, those are the stars.
"Oil and gas continues to be the laggard in all of this, and it just really hasn't gotten back to where it was before the pandemic," says Harvey. "If we're looking to a slowdown next year, the window for that sector to get back to where it was before the pandemic is going to close, pretty shortly."
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While an economic slowdown seems inevitable, as the Fed continues to raise interest rates to try calming stubborn inflation, there's a question of how hard Houston might be hit. Workforce Solutions projects the most optimistic job growth could top-out at 62,000, down 70% over current levels, to as low as 23,000 if interest rates and inflation remain high.
"If you start getting near a 20,000 (job) sort of forecast, you're getting dangerously close to zero at that point," warns Harvey. "It wouldn't take much to tip us into negative territory, as we enter 2024."
Fed Chair Jerome Powell says 'job loss' is a painful, but necessary part of raising interest rates to tame inflation. Already, there is indication that local employers are pulling back on some job postings. Of those, Parker Harvey believes trucking, warehouse, education and healthcare jobs have the best chance at remaining strong.