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Unemployment in Texas counties is up after February's winter storm hurt the state economy

UNEMPLOYMENT RATE
Texas' unemployment rate was
6.9%
in February, up from 3.7% in February 2020.
SALES TAX REVENUE
In March, Texas collected
$2.5 billion
in sales tax revenue, down 8.6% from March 2020.

The unemployment rate in Texas increased to 6.9% in February, which is more than double the record low of 3.4% in May 2019. In February, Texas' economic struggles were exacerbated as a deadly winter storm knocked large swaths of the state off the power grid for days and made roads impassable. The storm also impacted state sales tax revenue in February.

In March, the number of unemployment claims Texans filed each week jumped to levels not seen since last summer. Experts say that’s due to the February storm and a new congressional aid package that extended some benefits. But economists are optimistic that increased coronavirus vaccinations will help stabilize and improve the state’s economic recovery.

Still, the state’s outdated and understaffed unemployment insurance office has left countless Texans struggling to receive unemployment benefits as they navigate the Texas Workforce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.

Business shutdowns and limits battered Texas companies, which can now largely operate at full capacity. But businesses must choose whether to require their customers wear masks.

A decline in Texas’ sales tax revenue — the largest source of funding for the state budget — has created a shortfall that lawmakers will have to fill in the 2021 legislative session.

The unemployment rate increased slightly in February

Texas’ unemployment rate in February was 6.9% — an increase from the 6.8% January jobless rate, according to a Bureau of Labor Statistics report released March 26. February unemployment data shows that the change in unemployment rate includes the loss of nearly 600,000 Texas jobs in the last year. Only California and New York lost more jobs.

A deadly winter storm in February brought record-low temperatures and left millions without access to electricity when the state’s electric grid operator lost control of the power supply. The storm could be the costliest disaster in state history, potentially exceeding the financial toll from Hurricane Harvey.

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 February, when the winter storm impacted the economy. Joblessness is the worst in South Texas’ Starr County, where many people work in oil fields. The county recorded an unemployment rate of 19.4% in February.

Unemployment in Austin’s Travis County is at 5.6%, the lowest rate among Texas’ most populous urban counties. A handful of rural counties throughout the state are seeing unemployment rates below 4%.

Unemployment rate by county, February 2021

Sales tax revenue is down after the winter storm

In March, Texas collected $2.5 billion in sales tax revenue, down 8.6% from what the state collected in March 2020. The revenue came mostly from purchases made in February, when many businesses were affected by widespread power outages created by the winter storm. The total revenue for January, February and March was down 5.3% compared with the same period in 2020.

This year, March’s revenue does not include receipts submitted on March 1. Texas Comptroller Glenn Hegar extended the deadline for February’s receipts and included March 1 submissions in the previous month’s revenue.

Receipts from restaurants were up over the previous year’s levels for the first time since the start of the pandemic, according to Hegar. Oil and gas receipts were still down.

Change in sales tax revenue 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. The unemployment rate published each month is preliminary. 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. Brandon Formby contributed to this report.