The U.S. economy may be facing headwinds from inflation and higher interest rates, but the labor market is still on fire in North Texas.
Dallas-Fort Worth added 294,700 jobs in the 12 months ended in May, roughly three times more than the typical annual gains before the pandemic, the U.S. Bureau of Labor Statistics reported on Wednesday.
Only the New York and Los Angeles metro areas added more workers in the past year, and they have much larger employment bases.
Among metros with over 1 million people, D-FW ranked second in job growth rate — up 7.7% in May, behind only Las Vegas.
At the same time, the local unemployment rate remained low: 3.3% in May compared with 5.1% a year earlier, not seasonally adjusted.
“We’re still gonna see strong growth for a while,” said Adam Perdue, an economist with the Texas Real Estate Research Center at Texas A&M University. “It’s been primarily driven by the migration of companies and people. A lot of what happened during COVID seems to have supercharged the underlying growth in Texas. "
D-FW includes two metropolitan divisions, and the largest, Dallas-Plano-Irving, has been setting the pace. It accounted for over three-quarters of the region’s job gains in the past year.
In May, Dallas-Plano-Irving gained 21,400 jobs, seasonally adjusted. That was a slight decline from April but was higher than earlier months this year. And May’s gain was over three times greater than the monthly average in 2019, the last full year before the pandemic.
There have been signs of a slowdown in some parts of the economy, with Plano-based First Guaranty Mortgage Corp. laying off most of its workers. In addition, Texas manufacturers are tapping the brakes — some in anticipation of a potential recession.
Nearly a quarter of manufacturing executives said they cut production in June, a sharp increase from May, according to a recent survey from the Federal Reserve Bank of Dallas. Over 30% said new orders had declined and their company outlook had worsened — reflecting the most negative sentiments since the early months of the pandemic.
Despite those concerns, they’re continuing to hire, and more often than not, manufacturers and services companies said they expect to beef up employee rolls in six months, too.
“D-FW is a truly diversified market, and that’s a big reason hiring is still so hot here,” said Thomas Vick, Dallas-Fort Worth regional director of Robert Half, a major staffing firm.
Employment in Dallas-Plano-Irving surged 8.2% in the year ended in May, far ahead of historical trends. The growth rate was even faster than perennial leader Austin, which was up 6.7%.
And Dallas-Plano-Irving’s 12-month increase was the highest among 38 metropolitan divisions tracked by the BLS.
North Texas is the state’s leader in financial activities and professional and business services, Perdue said. Those sectors accounted for much of the outsized growth, as they have throughout the pandemic.
Over the past year, jobs in professional and business services grew 11.2% in Dallas-Plano-Irving. Since last May, the sector added over 61,000 net hires, and it’s had 14 consecutive months of double-digit, year-over-year gains.
Financial activities grew 9.5%, and transportation, warehousing and utilities rose 12.5%.
Restaurants and bars, among the hardest hit by the pandemic, continued a strong recovery. They added 6,600 positions for a 12-month gain of nearly 32,000. Since May 2021, local jobs in the industry are up nearly 16%.
“Eventually, this will slow down,” Perdue said, noting that such job increases cannot continue indefinitely. “But there’s still a lot of steam” left.
He expects growth to continue, just not at the same breakneck pace. In housing, there are already signs of a slowdown. Inventories of homes for sale in D-FW have roughly doubled since early this year, but they’re still far short of the traditional level, he said.
As a result, he expects housing prices to grow, just closer to historical norms — not the high double-digit increases of the past year.
“Since we have migration into Texas and we’re still relatively short of supply, we’re still seeing the pricing pressure, even in the face of increasing mortgage rates,” Perdue said.
Dallas-Plano-Irving added nearly as many jobs as Los Angeles-Long Beach despite the L.A. metro division having 1.5 million more workers.
Migrants from California, along with New York and Illinois, have helped fuel the faster growth here. Texas has been attracting companies and workers from higher-cost states for decades, and those trends accelerated during the pandemic.
That was partly because more employees had the option to work remotely, and many opted for here.
“On a daily basis, we’re hearing from candidates looking to relocate to Texas,” Vick said.
In a late May survey, Robert Half asked workers about their job searching plans, and 46% said they were limiting the job hunt to their home cities. Among Dallas-Fort Worth respondents, 60% said they wouldn’t go beyond the area.
“Most people don’t want to leave D-FW,” Vick said. “They see companies and people moving here, and other good signs — like rising home prices.
“If they’re gonna look for another job, they believe there are more opportunities here.”
