Houston economy rebounds from Harvey; state jobless rate hits record low

The Houston economy rebounded strongly last month after losing thousands of jobs in the aftermath of Hurricane Harvey, aided by the oil industry recovery and strong state and national economic growth.

The metropolitan area added more than 27,000 jobs in October, more than making up for the 20,000 lost in September after devastating floods shut and in some cases destroyed thousands of businesses across the region, according to data from the U.S. Labor Department. Even employment sectors hardest hit by natural disasters experienced substantial job gains. Local bars and restaurants, for example, added about 8,000 jobs from October 2016, a 3 percent increase.

"The rebound was disproportionately stronger than the associated loss," said Parker Harvey, senior economist at Workforce Solutions, an agency that provides, job training, placement and career counseling services in the Houston-Galveston area. "Overall, I'm a bit flabbergasted by this report."

The rebound comes against the backdrop of expanding state and national economies. The Texas unemployment rate fell to a record low in October, slipping below 4 percent for the first time in more than 40 years, the state Workforce Commission reported Friday.

The state jobless rate declined to 3.9 percent from 4 percent in September as job growth accelerated to an annual rate of 2.6 percent, nearly double the national rate 1.4 percent. All told, the state gained more than 71,000 jobs last month and has added more than 300,000 from over the past year, the Workforce Commission said.

The recovery of the oil and gas industry, which began to emerge from the worst energy bust in a generation last year, is helping to drive the growth. Across the state, the sector dominated by oil and gas companies gained 3,200 jobs in October, adding to year-long surge that has boosted energy employment 17 percent, or by more than 36,000 jobs. Those gains, however, sill represent only about one-third of the 100,000 energy jobs lost in the downturn.

In recent months, the oil recovery has seemed to move to firmer as oil prices have held above $50 a barrel and companies reported strong earnings. Exxon Mobil and Chevron, for example, each reported that third quarter profits rose more than 50 percent from the previous year.

Texas oil fields added another 7 drilling rigs this week, bringing the total in the state to 449, up about 60 percent from the same week a year earlier. Crude settled at $56.55 a barrel in New York Friday, up $1.41.

"It's a strong recovery given where oil prices are," said Karr Ingham, a Texas economist who studies the state's oil industry. "For a while in 2015, we were losing jobs in bigger chunks than we're getting them back right now. We're gaining momentum now, but it's going to be a while."

In the Houston area, the oil recovery is progressing more slowly. Employment in the energy sector was down last month by 5,400 jobs, or about 2 percent, from October 2016. Overall employment grew by 1.6 percent over the year -- a percentage lower than the state job growth rate.

Still, there's little doubt the local economy is on the mend after a brutal two-year oil bust that pushed scores of companies into bankruptcy and cost the region tens of thousand of jobs. The local unemployment rate fell to 4.1 percent, down from 5.3 percent in October 2016.

Houston's oil and gas sector was not without right spots, including energy services and support firms that added 5,600 jobs over the year, an increase of 16 percent, according to Labor Department statistics. Manufacturing, which is closely tied to energy here, also experienced strong job growth, gaining 10,000 jobs over the year, a 5 percent increase.

"We have definitely turned the corner and put the big job losses in energy behind us," said Bill Gilmer, director of the Institute for Regional Forecasting at the University of Houston.

The national economy has provided some tailwinds, expanding at a solid 3 percent annual rate in the third quarter, according to the Commerce Department. Job growth rebounded last month after a September slowdown blamed on major hurricanes that battered the Gulf Coast and Southeast.

U.S. employers added more than 260,000 jobs in October, bringing job gains over the last year to more than 2 million, according to the Labor Department. The national unemployment rate fell to 4.1 percent in October, from 4.2 percent in September and 4.8 percent from October 2016.

Collin Eaton, Jordan Blum and L.M. Sixel contributed.