Looks like we’re going to need some new applause lines for our elected officials.
When it comes to job growth, some Rust Belt states are gaining an edge on Texas amid the fallout from plunging oil prices.
In January, Texas lost its spot as the nation’s top job creator. The state ranked No. 4 with 20,100 new jobs that month, trailing California (67,300 jobs) and the Rust Belt states of Ohio (25,100) and Michigan (24,200), according to data released Tuesday by the U.S. Bureau of Labor Statistics.
What’s going on?
Texas vs. Michigan is an example of an oil-price-induced shift happening in U.S. regional growth patterns, said Robert A. Dye, chief economist for Dallas-based Comerica Bank.
“In the last five years coming out of the Great Recession, the energy sector has driven growth in the oil-producing states from Texas to Wyoming, and that’s where the bulk of new jobs have been generated,” Dye said. “Now, what we’ve been seeing is those oil-producing states losing momentum and other states gaining momentum as they benefit from lower energy costs.”
Michigan, for example, recently has seen strong growth in manufacturing, gaining 5,000 jobs in January.
[…]
Michael Wolf, a Wells Fargo economist, isn’t too worried about Texas.
“The glaring negative comes from the [energy] industry,” he said. “Is it just the beginning of worse to come with low oil prices staying low? I’m not sure. But there’s a lot more going on in Texas than just oil.”
I’m sure that’s true, but let’s be honest. It was the oil and gas boom that led to such good job creation numbers in Texas to begin with. Without it, we’re just another big state. As long as our population keeps growing rapidly, we’ll continue to add jobs at a healthy pace regardless of what the energy sector does, but with relocations likely to slow down as oil and gas cut jobs and with the continued demagoguery about the border, who knows? Maybe the population growth will slow down, too. We’re in for some interesting times.
I never realized this about Texas (and Houston especially) until recently. I started working in the area of downtown where all the energy companies are and happened to start reading Craig Unger’s “House of Bush House of Saud” at the same time.
Unger’s book really goes into Houston with the Bakers and the Saudis in the Seventies and the whole bit.
I was stunned. “That’s all this city is!” I said. “Oil and the ship channel!”
Everyone else has been, basically, “Duh.”
When oil prices dropped, you could really feel the air get sucked out of the room.