Denton County unemployment hit 12.9 percent in April, and the City of Denton saw unemployment spike to 14.1 percent last month. For the Dallas-Fort Worth-Arlington MSA, unemployment rose to 12.8 percent in April. Those were the sobering statistics from the Texas Workforce Commission. The destruction to the North Texas labor force created by the Covid-19 pandemic and lockdowns is hard to grasp, because the United States hasn’t experienced anything similar since the Great Depression. Even after the Great Recession in 2008 U.S. unemployment levels peaked around 10 percent.
The May unemployment numbers for Denton County and the North Texas are likely going to be even worse, and then we start to see what the longer term picture looks like.With the Texas economy reopening for business, the big question is how many people actually get to come back to their jobs. What does the new normal really look like. There are still a lot of unanswered questions. It’s going to take time to assess the real damage to the Texas labor force. One thing that’s certain is the the official unemployment numbers don’t capture the true extent of unemployment because they don’t take into account workers who had their hours cut, or those who simply quit looking for a job if they couldn’t find one.
The insured unemployment level for the U.S. recently breached 25 million. At the same time the Fed’s balance sheet has eclipsed a staggering $7 trillion as the Federal Reserve has tag teamed with the U.S. Treasury to prop up the stock market. Wall Street is swimming in liquidity, but the Federal Reserve can’t print jobs. The best they can do is flood the system with liquidity and hope that some of it makes its way from the profiteers and rentiers into the real economy. The trickle-down monetary and fiscal stimulus is going to make for a very choppy recovery at best.
Denton County workers are itching to get back to business, and that’s a good sign. Texas will likely continue to benefit from states like California who clamped down hard (perhaps too hard) in an effort to control the spread of the virus. Some areas of the country have seen public backlash as citizens rush to get back outside after months of being in quarantine. It’s hard to blame many of them, particularly if their state unemployment assistance or Federal stimulus has not panned out as advertised. Millions of Americans are still waiting for assistance that hasn’t arrived, so unemployment comes with consequences that are often just as devastating as the virus itself. It’s easy to advocate for a cautious stance with the virus if you are still receiving a paycheck from a government/public job. It’s quite a different scenario if you run a business that depends on consumer activity to keep the bills paid.
North Texas shed over 350,000 jobs from March to April, wiping out years of employment gains in a single month…
Here’s a picture of continued U.S. unemployment claims.
The Fed is reverting to the old playbook of flooding the system with liquidity. Wall Street and corporate America have once again received a major lifeline courtesy of U.S. taxpayers. Will those jobs come flooding back in return, or will CEO’s take the money and run?
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