Texas continues to create jobs despite energy cut backs

Wall Street Journal:

Employment bounced back in Texas last month following recent losses, a sign that the state is weathering the slowdown in the energy industry, the Labor Department said Friday. By contrast, in North Dakota, which is also heavily reliant on energy production, employment continues to fall as the state grapples with a slowdown in energy prices.

Texas added 33,200 jobs in May, the third-largest month-over-month employment increase in the country, the department said. Just two months ago, in March, Texas saw 25,400 jobs disappear. The state’s unemployment rate stands at 4.3%, down from 5.1% in May 2014. The national unemployment rate was 5.5% in May, according to the Labor Department.

Since its last oil-related boom and bust cycle three decades ago, Texas has sought to diversify its economy. Much of the state’s growth has taken place in the Dallas-Fort Worth area and around San Antonio, two regions that have expanded their tech sectors.

It’s a different story in North Dakota. The state saw a massive rampup in energy production in recent years as new technologies made oil and gas extraction easier. Between October 2008 and February of this year, North Dakota boasted the lowest state unemployment rate in the nation, the Labor Department said. Nebraska now has the lowest unemployment rate at 2.6%.
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While the energy sector is still important to Texas, it is no longer critical to jobs growth.  I would include Austin as an area where the tech sector has created thousands of jobs. And, despite being the energy capital of the world, Houston has also diversified its economy.   The Texas model is still working and those who attributed its success to the energy boom were mistaken.