Local unemployment numbers are “unusually” high
Local unemployment numbers, while relatively low, are unusually high for our area.
BRYAN, Texas (KBTX) - The Texas A&M Private Enterprise Research Center (PERC) recently released its monthly report tracking the health of our local economy and found that local unemployment numbers, while relatively low, are unusually high for our area.
Texas A&M PERC Director Dennis Jansen joined First News at Four to talk about that report and break down where our local economy stands as we close in on almost one year since the COVID-19 pandemic began.
“COVID cases matter,” Jansen said, “[they] have both a direct and indirect effect [on our local economy].”
He says one example of the direct effects is the restrictions on capacity. Indirect effects are consumers’ tendencies not to venture out as much when COVID-19 cases are high.
He explains those are just general effects economists are beginning to gather empirical data on. But what makes our area especially prone to spikes in cases is what PERC refers to as the mobility and engagement index.
The statistic was created by the Federal Reserve Bank of Dallas that uses the tracking data in people’s phones to track their trips away from their home area. According to the index, residents in the Bryan-College Station area are the most likely in our region to travel away from home during the pandemic.
The first spike can be seen at the start of the pandemic when students and non-resident Texas A&M faculty and staff returned home. The second major spike is in December when Texas A&M recessed for winter break.
“It very much tells how people are moving about,” Jansen said.
Jansen says that’s likely due to the high proportion of students compared to the local population. Another reason, Jansen speculates is due to the relatively young population in our area. He believes that younger people tend to travel more during the pandemic than older populations.
But he says despite the documented negative effects that a high number of COVID-19 cases can have on an economy, our local unemployment rate remains comparatively low to the rest of the state.
“As typical, our unemployment rate is the second-lowest in the state,” Jansen said.
Our area is tied with the Austin-Roundrock area. Jansen says it’s atypical to have such a large area like Austin-Roundrock have such a low unemployment rate.
“Even though College Station-Bryan is low within our state, it’s 5.4 percent. It’s getting pretty close to the national [unemployment rate] 6.3 percent,” said Jansen.
He says that’s quite unusual because our area is usually well below the national unemployment rate.
One statistic that can be difficult to understand is the Business Cycle. It’s a metric created by researchers at PERC using a number of statistics, like local unemployment and taxable sales, to track the growth of our economy.
The graph seems to spike rapidly since the pandemic began indicating periods of huge growth and periods of massive decline. Jansen says that’s because of the volatility caused by COVID-19.
“If anything it shows a slight negative trend for the local economy,” said Jansen.
He says not much progress has been made in growing our local economy since September, which makes sense because local unemployment has also been volatile in that time frame. Jansen says local unemployment is a good predictor for how the Business Cycle will trend and as local unemployment has been on the rise since September, the Business Cycle is trending slightly down.
While all other MSA’s (Metropolitan Statistical Areas) are experiencing a decline in local unemployment, the Bryan-College Station MSA is slightly increasing.
“That’s related to the sort of rising and perhaps volatile unemployment rates that we’ve seen in Texas,” Jansen said.
The trend is probably related to the hit the oil and natural gas industry experienced that’s been shrinking since the pandemic began, according to Jansen. He says it’s also due to, in part, to the pandemic itself.
But Jansen says that doesn’t mean our area is suffering disproportionately.
“Overall, we’ve fared fairly well,” Jansen said.
He says the large contribution the restaurant and bar industry has to our local economy makes it difficult to succeed entirely while in a pandemic. The tourism that Texas A&M usually generates is down, and that’s going to continue to prevent our local economy from reaching its full potential until the COVID-19 pandemic passes.
Copyright 2021 KBTX. All rights reserved.