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Metro Houston closed out ’25 with a 4.2 percent unemployment rate in December, according to data released by the Texas Workforce Commission. The local unemployment rate has retreated steadily from its 5.0 percent peak in August, including a 0.3-point drop from 4.5 percent in November. December marked the region’s lowest reading since May, though it remained slightly above the 4.0 percent reading a year prior in December ‘24. Houston’s unemployment still ran marginally higher than both the U.S. (4.1 percent) and Texas (3.9 percent).

Local unemployment rates ranged from 3.6 to 7.2 percent among the 16 Houston-area cities where data is reported. Conroe, Friendswood, Galveston, Houston, League City, Pearland, Rosenberg, and Sugar Land had lower unemployment rates than the metro area average. Alvin, Baytown, Deer Park, La Porte, Lake Jackson, Missouri City, Pasadena, and Texas City had higher unemployment rates.

Initial unemployment claims have continued to fall sharply, dropping from a recent high of 4,873 in the third week of November to 3,910 in the third week of January. That’s a 19.7 percent decline in roughly two months and the lowest weekly total since January ’24. A decline in the unemployment rate in December is not unusual as retailers hire temporary workers for the holiday rush and some job seekers pause their search due to the winter school break or other year-end obligations.

Prepared by Greater Houston Partnership Research Division.

Colin Baker
Manager of Economic Research
Greater Houston Partnership
[email protected]

Clara Richardson
Research Analyst
Greater Houston Partnership
[email protected]