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10 months into pandemic, Texas’ unemployment rate stays near Great Recession-level highs

Texas' unemployment rate was
in December, up from 3.5% in December 2019.
In January, Texas collected
$3.1 billion
in sales tax revenues, down 0.3% from January 2020.

Business shutdowns and limits on their operations through the coronavirus pandemic have battered Texas companies, which are now grappling with another devastating surge in infections as intensive care units at dozens of hospitals across the state are full. Entire industries — bars and restaurants, tourism and travel, oil and gas — continue to struggle.

The unemployment rate in Texas decreased to 7.2% in December, more than double the rate of 3.5% a year earlier. Hungry and homeless Texans have been confused about the prospect of more federal coronavirus relief while the state’s outdated and understaffed unemployment insurance office has left countless Texans struggling to receive unemployment benefits as they navigate the Texas Workforce Commission’s confusing processes.

A decline in Texas’ sales tax revenues — the largest source of funding for the state budget — has created a shortfall that lawmakers will have to fill in the 2021 legislative session. Economists say weakened global demand for oil, high unemployment and the ongoing public health crisis will continue to weigh down Texas’ economic recovery.

The unemployment rate decreased in December

Texas’ unemployment rate in December was 7.2% — a decrease from the 8.1% November jobless rate, according to a Texas Workforce Commission report released Jan. 22. The state's unemployment rate for December is the latest indicator that the economic recovery in Texas will be slow and staggered.

Unemployment rate

Unemployment by county

The impact of the coronavirus recession varies widely across Texas. The latest data showing how the unemployment rate varies in Texas counties is from December. Joblessness is the worst in South Texas’ Starr County, where many people work in oil fields. The county recorded an 18.5% unemployment rate in December. The oil-rich Odessa area in West Texas suffered the largest collapse of jobs in any metro area in the state from December 2019 to December 2020.

Unemployment in Austin’s Travis County is at 5.1%, the lowest rate among Texas’ most populous urban counties. A handful of rural counties throughout the state are seeing unemployment rates below 3%.

Unemployment rate by county

Sales tax revenues were close to January 2020 levels

In January, Texas collected $3.1 billion in sales tax revenues, down 0.3% from what the state collected in January 2020. Those revenues came mostly from purchases made in December, when the state was experiencing a second surge in key coronavirus metrics and after Gov. Greg Abbott ruled out any new statewide business restrictions. The total revenue for November, December and January was down 3.9% compared with the same period in 2019 and 2020.

Gains in the retail sector were offset by large declines in revenue from entertainment venues, fitness centers, restaurants, and the oil and gas sectors, according to Texas Comptroller Glenn Hegar.

Change in sales tax revenues from previous year

About this data

The unemployment rate for Texas is updated on the third Friday of each month with data from the Bureau of Labor Statistics Local Area Unemployment Statistics program or the Texas Workforce Commission. County unemployment rates are generally updated two weeks after the statewide rate. Sales tax revenue data is updated at the beginning of each month.

Disclosure: The Texas Comptroller of Public Accounts has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.

Correction: An earlier version of this story listed state sales tax revenue incorrectly. The amounts are in billions of dollars.

Illustrations by Emily Albracht. Mandi Cai and Brandon Formby contributed to this report.