D-FW added 23,000 jobs last month, led by hiring at restaurants and bars
Has the pandemic economy finally passed a tipping point?
In March, attitudes in Dallas-Fort Worth rebounded sharply. 23,000 jobs were created in the region, the largest monthly increase since October.
There was an encouraging rebound from February, when D-FW lost over 25,000 jobs after a brutal winter storm cut off power for days.
Optimism grows that the pandemic economic roller coaster will come to an end when more people are vaccinated and return to restaurants and gatherings.
According to the US Bureau of Labor Statistics, Texas created 99,000 jobs and the US over 900,000 jobs in March. The strong employment numbers – the best for the nation since last summer – prompted the Dallas Federal Reserve Bank to raise its forecast for 2021 employment growth.
Texas is expected to create over 800,000 jobs by the end of the year, the Dallas Fed said. That would be a record profit, far exceeding the 417,000 jobs added nationwide in 2014. Historically, D-FW accounts for a large part of the state’s new jobs, so big profits are also expected.
“We’re growing everywhere and industries across the board are returning,” said Jay Denton, chief analyst at ThinkWhy, a Dallas-based software services company whose products benchmark top talent and salaries in the United States
Many expected that hiring would accelerate rapidly in the second half of the year as it would take a while for the vaccinations to be distributed and for companies to regain confidence.
“It seems like it’s happening about three months earlier than expected,” said Denton, who published an online article on Wednesday under the heading, “A tidal wave of attitudes is taking shape.”
Last month, the North Texas area saw a sharp increase in jobs in restaurants and bars, as well as in the other services category, which include hair styling, car repair and laundry. The two sectors were hardest hit during the pandemic, but together they created nearly 10,000 jobs in D-FW in March.
Despite the sharp increase, both employment sectors remain around 10% below employment levels before the pandemic. Together they had 42,000 fewer D-FW employees in March than in February 2020.
The recovery from the COVID-19 recession is likely to be faster than previous recessions, according to a recent report by a research analyst and two Dallas Fed economists. They said the Texas downturn was very similar to the effects of a natural disaster, comparing the history of job losses during COVID to the economic aftermath of Hurricane Katrina in Louisiana.
The decline in jobs and output was much steeper than a typical recession, and a quick return to growth followed a few months later, they wrote. However, full recovery can take a year or more.
“Some of the structural changes caused by the pandemic will take longer,” they wrote.
In January Dallas Fed polls of Texas executives, nearly half said headcount remained below pre-pandemic levels. Almost one in five of these respondents do not expect to ever go back to these numbers, the report said.
“These companies indicate an increase in efficiency and productivity or rationalization due to the introduction of technology,” the researchers wrote. “Several companies said they were overstaffed ahead of the pandemic.”
The work-from-home movement has gained real traction. Before the pandemic, around 8% of employees were working remotely, according to surveys by the Dallas Fed. The proportion rose sharply during the health crisis, and executives said nearly 21% of workers would continue to work remotely after the pandemic ended.
“The efficiency of the home has surprised many in a variety of industries,” said the researchers.
This should reduce the demand for office space, which would affect downtown Dallas as well as the business centers in Irving, North Dallas and Collin Counties. A quarter of companies expect a permanent reduction in business travel, which has a major impact on the large North Texas aviation industry and the business with meetings and events.
How much travel is coming back and how quickly it will also affect hotels, restaurants, retail and convention centers, the report says. Nearly 10% of Dallas jobs are in the leisure and hospitality industry, which relies on travelers.
That is a significant proportion, albeit smaller than that of the state and the nation. Tourist-friendly places like Corpus Christi and San Antonio are more exposed on this front. Ironically, they can fuel immediate job growth.
“When you have more free time and more hospitality, you have lost more jobs,” said Pia Orrenius, senior economist at the Dallas Fed. “But now you’ll grow faster because these jobs are coming back.”
One thing strikes her: “The reorganization of the economic activity of the labor force is likely to be permanent,” Orrenius said in an interview earlier this month. “Moving away from brick-and-mortar retail, for example, and even some recreational and hospitality workers moving into e-commerce.”
In D-FW, the large leisure and hospitality sector has lost 53,600 jobs since February 2020, even after having achieved growth in the last two months. Department stores also cut 3,500 jobs in D-FW during this time – while transport, warehouses and utilities created over 11,000 jobs here.
Nationwide, the warehouse segment created over 41,000 jobs during the pandemic. This corresponds to an increase of 40%, which is mainly due to the growth of e-commerce.
Despite the still high unemployment rate, Denton said it was likely to be a difficult year hiring new workers. Many are reluctant to switch companies because of the disruption of the pandemic. For those who have worked remotely, the landscape may have changed forever.
“A lot of people say they’ll only get a job that allows them to work from home, and that wasn’t the case before the pandemic,” Denton said. “If you can’t do that, it’ll be a challenge.”