Texas unemployment rate rises to 8.3% in September, seven months into economic recession

Pueblo Viejo in Austin, like restaurants across the state, closed its dining operations following an executive order from Gov. Greg Abbott earlier this year. The state’s unemployment rate dropped after businesses began reopening, but it rose again in September. (Credit: Eddie Gaspar/The Texas Tribune)

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The Texas unemployment rate rose to 8.3% in September, the Texas Workforce Commission said Friday, a sharp increase from the August unemployment rate of 6.8%.

The uptick, economists said, shows how some industries that had hoped to weather the coronavirus pandemic’s economic recession have not been able to do so and instead have announced large numbers of layoffs. The announcement also shows that a lot of Texans are jobless seven months into the pandemic despite widespread business reopenings across the state.

Friday’s announcement provides what could be the clearest snapshot of the Texas economy ahead of the Nov. 3 elections. Peter Rodriguez, Dean of the Jesse H. Jones Graduate School of Business at Rice University called the increase “evidence that we didn’t take the short route out of the recession.”

“We’re going to be here for a little while," he said.

The airline industry has been particularly hard hit in recent weeks. That sector laid off tens of thousands of people as the travel industry continues suffering during the prolonged pandemic, according to The Washington Post. American Airlines is based in Fort Worth, Southwest Airlines is based in Dallas and United Airlines counts Houston as one of its hubs.

“What we saw with companies like the airlines and others is happening throughout the economy,” Rodriguez told The Texas Tribune. “Airlines held out in hope for more rapid recovery. But as that hope faded, a lot of them cut back more and made tough choices.”

The U.S. Department of Labor is expected to release the state-by-state unemployment rates Tuesday. A spokesman for the workforce commission said next week’s release from the labor department will also show Texas' unemployment rate in September was 8.3%.

This is a developing story and will continue to be updated.

Rice University, Rice University-Jones Graduate School of Business and Southwest Airlines have been financial supporters 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.