After surpassing Great Recession levels in April 2020, the unemployment rate went down

The statewide unemployment rate had been slowly declining for nearly a decade until April 2020, when the rate surpassed Great Recession highs as Texas scrambled to shut down its businesses. More than 1.4 million Texans lost their jobs due to the pandemic in March and April 2020, according to the TWC.

But as of May 2021, the state had gained back around 1 million jobs since the previous spring. In April and May 2021 alone, 47,400 jobs were added in Texas. The unemployment rate dropped to 6.5% in May 2021 — higher than pre-pandemic levels, but around half of the record-high 12.9% in April 2020.

Although more people have been hired recently, many are still facing obstacles reentering the workforce. On June 26, hundreds of thousands of Texans will lose the assistance they received through two federal unemployment aid programs after Abbott opted the state out of federal aid.

Every major industry in Texas suffered losses in jobs when the coronavirus began spreading last spring. Employment in leisure and hospitality, which includes jobs in restaurants, hotels and entertainment, dropped by 38% — over 500,000 jobs — from March to April 2020. Almost 150,000 jobs in that sector were added back the next month. The mining and logging sector, which includes the oil and gas industry, saw employment decrease by 11% from March to April 2020 and continue to drop for several more months. Jobs in education and health services also fell by 10% in April 2020.

The impact of the coronavirus recession varied across Texas

The unemployment rate during the height of the pandemic varied across the state. Joblessness was the worst in South Texas, where many people work in oil fields. During the pandemic, Starr County recorded the highest unemployment rate out of all Texas counties at 21.7% — one in five of its residents age 16 and older were unemployed in April 2020. (The rate does not include institutionalized residents or those on active military duty.)

Some of the biggest jumps in unemployment rate were in Yoakum, Crane and Ector counties, which are all in the oil-rich Permian Basin. In 2020, there were sustained job losses in the manufacturing, natural resources and mining and trade and transportation sectors in those counties compared with the same period in 2019, according to the Quarterly Census of Employment and Wages. Large urban counties also saw significant decreases in employment, but these areas were slowly recovering by May 2021.

Sales tax revenue began rebounding after a year of decreased funds

For the majority of the first year of the pandemic, sales tax revenue each month remained below what was collected during the same period the previous year. In May 2020, the sales tax revenue was down 13% from what the state collected in May 2019, a decrease of around $395 million.

But the May 2021 receipts showed that spending was picking back up. Sales tax revenue in May 2021 was up 30.1% compared to May 2020 and up 12.9% compared to May 2019. The retail sector saw a particularly significant increase as customers returned to stores opening at full capacity. Restaurants also saw more business compared to the previous year’s levels.