Austin Economy hits covid wall, unemployment spikes

Austin Business cycle index March 2020

The Austin area’s unemployment levels made a sharp uptick in March according to the Dallas Federal Reserve’s Economic Indicators Report, but note the economy was still growing.

By the Fed’s count the Austin area economy still grew by 2.9% on the Business Cycle Index (BCI), which factors in things like the local job market, Unemployment rate, and Real Estate market. While growth local still trended positive, the Austin area’s long term average BCI holds at 6.2%. The Fed’s Judy Tang credits this sharp decline in performance to their data just starting to catch up to the ongoing Covid 19 crisis.

Tang said the Austin Area Job market took a beating as the covid crisis began, losing 8.3% of total jobs as compared to March of 2019. She said the industries hit the hardest were Leisure and Hospitality (-10.9%, or 3,910 jobs), Health and Education (-6%, or 2,020 jobs), and Professional Business Services (-4% or 2,070 jobs).

The Unemployment rate in March tracked up to 3.4% but the Fed notes more recent data of people applying for unemployment benefits shows a more dire image with total initial claims filed from March 7 to April 25 (69,526) represented 9.3% of the labor force in Travis County. Tang also pointed to the national unemployment level which last week (March 8th) showed levels at 14%, and believes the Austin Area will see it own increases as well.

The Real Estate Market had a somewhat unexpected effect to the crisis in March with the average local price ($338,143) still trending up by 10% as compared to the first quarter of 2019 , though officials note the real estate data comes from the whole first quarter of 2020 and there still was a dip at the end of their timeline. They also note a 6.1% drop in building permit applications in March.

(Photo:Dallas Federal Reserve)

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