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Amid U.S. slide, Texas sheds jobs

12:11 PM CDT on Saturday, October 18, 2008

By BRENDAN M. CASE / The Dallas Morning News

Texas' long run of job gains in the face of a national decline ended last month, with the state losing 4,000 nonfarm jobs.

The preliminary number represents the state's first monthly loss since April 2007.

Meanwhile, unemployment edged up to 5.1 percent from 5 percent in August, the Texas Workforce Commission said Friday.

State officials chalked up the deterioration in the Texas job market to the accelerating downturn in the U.S. economy, which was getting weaker even before the global financial crisis boiled over last month.

"September job losses in Texas reflect continued turbulence in the national economy," said Tom Pauken, commission chairman.

One negative month does not constitute a trend, economists pointed out, and September's job loss is relatively small in the context of the state's employment base of more than 10.6 million nonfarm jobs.

But the shift into negative territory could be a harbinger of more bad news as Texas begins to feel the chill from an anticipated U.S. recession.

"It's certainly a clear indication that the Texas economy has indeed slowed down but that we remain much stronger than most of the rest of the country," said Terry Clower, a University of North Texas economist.

The U.S. economy has shed jobs for nine months in a row, including a loss of 159,000 in September. The national jobless rate stood at 6.1 percent in September – a full percentage point higher than that of Texas.

Moreover, many parts of the Texas economy continued to add jobs in September, with another 2,300 positions in education and health services, and 2,200 in natural resources and mining.

The leisure and hospitality industry added 1,600 jobs, and employers in professional and business services created 1,100.

But the trade, transportation and utilities sector was down 2,700 jobs, while manufacturing lost 2,600 and construction employment dropped by 1,700.

Walker Fenci, a Frisco staffing executive who specializes in the information technology industry, says he's seeing less demand from his 80 clients for full-time employees, or "direct hires."

But demand varies by industry.

"We've seen a slight decrease in the direct hire orders, mainly in retail and financial," said Mr. Fenci, managing director for the Dallas-Fort Worth area at Technisource, the IT and engineering unit of Spherion Corp., a staffing company in Fort Lauderdale, Fla.

But, he added, "In health care, energy and business services, clients are either holding steady or growing."

August was up

Texas employers wound up creating 6,900 nonfarm jobs in August, based on the revised figures released Friday. The preliminary number, reported last month, was 6,700.

Unemployment claims in Texas rose threefold in September compared with August, due largely to Hurricane Ike, said Mr. Pauken, of the workforce commission.

Meanwhile, the unemployment rate in the Dallas-Fort Worth area – which, unlike the state jobless rate, is not adjusted for seasonal factors – rose to 5.3 percent, compared to 5.1 percent in August and 4.3 percent in September 2007.

Since government number crunchers collected the September jobs data in the days before the storm hit, Ike's effects on jobs created or lost are apt to become more apparent next month.

Whatever the storm's impact, Waco economist Ray Perryman expects the state economy to continue to feel the effects of the global financial maelstrom – and the weakening U.S. economy.

"We will have some job loss from it," he said. "The question is how much dampening do we get because of this?"

Texas will continue to outperform the nation as a whole, local economists say. But more months of jobs losses are expected to follow September's.

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