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Economy at a Glance - August 2022

This issue of Glance examines the region’s economic performance through mid-year, with special attention paid to employment, energy, real estate and transportation.
Published on 8/15/22

Houston at Mid-Year

The first half of ’22 was the strongest opening on record for Houston’s economy. Job growth surged. The unemployment rate fell. Houston’s civilian labor force grew significantly. Exports set a record. Container traffic soared. Crude topped $100 per barrel. The rig count approached pre-pandemic levels. And brokers leased a record amount of industrial/warehouse space.

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Only a few sectors struggled. Rising interest rates and soaring prices cut into home sales. Double-digit inflation weighed on consumer spending. The apartment market began to soften. And little progress was made in reducing the glut of office space.

Even so, the positives greatly outweighed the negatives. Houston enters the second half of ’22 with considerable momentum. The region should grow through the end of this year and well into next. What follows is the Partnership’s assessment of the economy at mid-year.

Nonfarm Payroll Employment

Metro Houston created 84,600 jobs in the first half of ’22. That’s the best start on record for the region, better than any year in the ’80s, when the domestic rig count topped 4,500, or the early ’10s, when the Eagle Ford Shale boom lead Houston out of the Great Recession.

In the aggregate, Houston has recovered all the jobs lost in the pandemic. Nonfarm payroll employment topped 3.2 million in June ’22. That’s 75,500 above the previous employment record set in November ’19.

The recovery has been uneven, though. Eleven sectors have fully recovered their pandemic losses: administrative support (37,300); arts, entertainment, and recreation (23,700); educational services (12,900); finance and insurance (6,200); government (8,600); health care (47,900); professional, scientific and technical services (16,300); restaurants and bars (111,900); retail (57,400); transportation and warehousing (20,300); and wholesale trade (12,300). 

At their current pace of growth, a handful of sectors should recover their remaining losses within the next month or so (jobs needed in parenthesis): real estate and equipment rentals (200); information (700); hotels (2,300); other services (3,400); and construction (5,700).

Only two sectors still struggle: manufacturing (9,100 jobs) and energy (9,400 jobs). The bulk of the manufacturing jobs still to be recouped are in oil field equipment manufacturing. They won’t return without a significant increase in drilling activity. As of mid-August, the U.S. rig count had yet to return to its pre-pandemic level. 

Though energy companies reported record profits in Q2/22, they are reluctant to significantly expand their payrolls. Instead, they are repurchasing shares, paying dividends, funding alternative energy efforts, and marginally increasing exploration programs.

Civilian Labor Force

Metro Houston added over 60,000 workers to its labor force in the first half of this year and nearly 100,000 over the past 12 months. Houstonians who dropped out during the pandemic have re-entered the job market. The economy has also benefitted from the surge in new residents to the region. In June ’22, the workforce hit 3,521,124, an all-time high for the region.

Workforce estimates come from the Current Population Survey (CPS), which is based on a survey of households. Payroll data comes from the Current Employment Series (CES), which is based on a survey of employers. The two surveys tend to align on the direction of job growth but often disagree on the magnitude. Data from the most recent CPS suggest Houston has added only 56,680 jobs so far this year, well below CES estimates and the second best start to the year on record. The best start according to the CPS was ’10 when the region created over 96,000 jobs.

Initial Claims

Initial claims for unemployment benefits, a proxy for layoffs in the region, trended down through late spring then inched up starting in April. They remain well below pandemic peaks, however, and are only marginally above pre-pandemic levels.

Most of the recent layoff announcements have been at the national level, not a response to a local slowdown. Layoffs are concentrated in the tech sector and the digital currency trading platforms, not a slowdown in the national economy. Almost none of the layoffs impact Houston.

Continued Claims

There were 22,122 continued claims for unemployment benefits filed in the Gulf Coast Region the second week of June. That’s up from 20,221 in May but an improvement over the 43,092 filed in June of last year. The drop suggests those who have lost jobs had little difficulty finding new ones. Continued claims peaked at 276,116 in June ’20. 

To continue reading, download this report.

Note: The geographic area referred to in this publication as “Houston,” "Houston Area” and “Metro Houston” is the nine-county Census designated metropolitan statistical area of Houston-The Woodlands-Sugar Land, TX. The nine counties are: Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery and Waller.

Key August Takeaways

Here are the facts to know about the Houston region this month
1
August Takeaway #1
The first half of ’22 was the strongest opening on record for Hou­ston’s economy.
2
August Takeaway #2
The Houston Purchasing Mangers Index has held above 50 for 24 consecutive months. Any reading above 50 indicates an expanding economy.
3
August Takeaway #3
The U.S. Energy Information Administration forecasts crude to trade above $90 per barrel through the end of the year, well above the $60 most producers need to profitably drill a new well.

Want to learn more? Contact our Research Team:

Patrick Jankowski, CERP
Senior Vice President, Research
713-844-3616

Previous Issues of Economy at a Glance

JUL
2022
The Houston Housing Market, Affordability, and Recent Shifts
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JUN
2022
Economic Recovery, Population Growth & Global Houston recap
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MAY
2022
Economic recovery, rising costs & labor force
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APR
2022
Population growth and employment data
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MAR
2022
Local Impact of a Global Event
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FEB
2022
Post-Analysis of 2021 Houston Economy
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JAN
2022
Omicron, GDP, Employment
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DEC
2021
2022 Employment Forecast
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NOV
2021
Job Gains, Real Estate, Exports
Read Report
OCT
2021
Inflation, Employment & Global Innovation
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SEP
2021
Employment, Oil & Gas, Containerized Exports, and Housing
Read Report
AUG
2021
Delta Variant, Rebounding Travel, Economic Growth and Population Gains
Read Report
JUL
2021
Energy Transition, Recovery Bottlenecks, & the Worker Shortage
Read Report
JUN
2021
Economic Recovery, Multifamily, Population & More
Read Report
May
2021
Housing Boom and Robust Recovery
Read Report
APR
2021
Pandemic Recovery, Tech Workforce
Read Report
MAR
2021
Pandemic Employment Data
Read Report
FEB
2021
Coronavirus Impact and 2021 Outlook
Read Report
JAN
2021
Racial Demographics and Population Shifts
Read Report
NOV
2020
U.S. Recovery, 2021 Outlook
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OCT
2020
U.S. Recovery, Houston Update
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SEP
2020
COVID-19 Impact on Economy
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AUG
2020
Energy Change Over Time
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JUL
2020
COVID-19 Update, Houston Unemployment
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JUN
2020
COVID-19 Update, Affected Sectors, Energy
Read Report
MAY
2020
U.S. & Texas Outlook, GDP
Read Report
APR
2020
COVID-19 Update, PMI, Industry Outlook
Read Report
MAR
2020
Economic Impact, Global Outlook, Recession Probability
Read Report
FEB
2020
U.S.-China Trade Deal, USMCA
Read Report
JAN
2020
Houston GDP, Energy, Jobs
Read Report
DEC
2019
Sector by Sector Forecast for 2020
Read Report
NOV
2019
Houston Region Demographic Update 2
Read Report
OCT
2019
Houston Region Demographic Update 1
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SEP
2019
Houston's Growth Engines
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AUG
2019
PMI, Commercial Real Estate & Housing
Read Report

More Insight & Analysis

Monthly Update: Inflation

Review the latest data on inflation in the Houston area. 

Monthly Update: Employment

Review the latest data on jobs in the Houston region. 

Monthly Update: Purchasing Managers Index

Review the latest data on this key economic indicator. 

Get more in-depth analysis from the Partnership team with a Membership.