Eric Griffin, Managing Director, Research & Innovation
The U.S. jobless rate continued its decline in September to 7.9%. This is down from a high of 14.7% in April after businesses across industries rapidly shed jobs in response to the spread of COVID-19 and the restrictions enacted to stem that spread. While publication of state and metropolitan data lags that of the national rate, both Texas and the Dallas Region have also seen a steep decline to 6.8% and 6.3%, respectively, in August.
View the full report: Economy in Brief: Indicators for the Dallas Region
At first appearance, positive figures came in as the U.S. added more than half a million jobs in a single month for just the sixth time in a decade; total nonfarm payroll rose by 661,000. However, the pace of job growth has slowed considerably from August to September. The U.S. created 1.5 million jobs in August for a total of 11.4 million rebound jobs since the initial loss of 22.1 million jobs in March and April. At this pace, the U.S. will not return to pre-pandemic levels until early 2022, and it will be late 2022 before reaching the pre-pandemic trajectory.
The Dallas Region created 34,800 seasonally adjusted jobs in August. In order to make up for the hundreds of thousands of jobs lost in March and April, Dallas Region employers would need to continue at this pace until early 2021, a substantially shorter time frame than the country as a whole. Additionally, the Dallas Region could return to the pre-pandemic trajectory for job creation by late 2021, more than a year sooner than the U.S. However, the pre-pandemic 10-year average job growth is only 8,000 per month, a rate which could result in several years of catch up.
Compounding the employment picture is the continued uncertainty facing small businesses operating in an uncertain environment. According to Opportunity Insights, small business revenues are down by 20% or more since the beginning of the pandemic on both sides of the region. The number of small businesses still in operation is down by a similar margin.
Nationwide, an October survey by the American City Business Journals uncovered small business sentiments that support the transaction data finding for small businesses in Dallas. More than two-thirds of respondents reported a decline in revenue since March due to COVID-19. Respondents also signaled much lower profitability, a reduced number of cash-flow positivity, and a fear of running through savings in five months or less. As the Small Business Administration works out the Paycheck Protection Program loan forgiveness process, officials will find fewer loan recipients to help as more small businesses shut their doors.
“Economy in Brief: Indicators for the Dallas Region” is an ongoing series, presented by Bank of America, that offers easily digestible insights into our economic landscape. The data points and analysis tools allow our business community to make informed decisions based on trends. Our reporting also measures the impact of COVID-19 on our economy.