Are Austin jobs becoming harder to find? That depends. “Local economic indicators remain strong for the most part, despite wariness about the possibility that a broad nationwide downturn could put a damper on activity in the metro area,” Austin American-Statesman’s Bob Sechler wrote earlier this month.
What’s really happening nationwide, how does that translate locally and, most importantly, how does that affect Austin jobs?
What’s Going on with the Economy?
Sechler points out, “There’s little doubt the national economy is struggling…High inflation has increased costs for food and fuel, and the Fed’s effort to tame it by raising interest rates has made it more expensive to borrow money and cooled housing markets. Meanwhile, the stock market has fallen substantially this year, and a number of big-name companies nationally have begun laying off workers, including retail giant Walmart, automaker Ford Motor Co. and software company Oracle, which is based in Austin.”
AP also reports confusing numbers: General wholesale prices fell in July for the first time in more than two years and “a sign that some of the U.S. economy’s inflationary pressures cooled last month.” Trucking freight costs and other “supply chain snarls are easing.” But hold on: AP goes on to admit that “wholesale food prices rose 1% from June to July, a sign that grocery prices will likely keep rising in the coming months.”
So are we in or heading into a recession? It depends on who you ask.
“Technically, the country is in a recession when gross domestic product, the value of all goods and services produced during a specific period, falls during two quarters back to back. [July’s] results proved this was the case: GDP dropped by 1.6% in Q1 and 0.9% in Q2, according to the advanced estimate by the Bureau of Economic Analysis,” explains CNET Money Editor-at-Large Farnoosh Torabi. “While all signs point to a recession, in the U.S., this is determined by the National Bureau of Economic Research — and it has not called a recession yet.”
Torabi sums things up by outlining these two important points:
- Based on the latest numbers, the U.S. is in a period of decline — possibly even a recession.
- Recessions are historically marked by a period of widespread layoffs, bankruptcies, higher borrowing costs and turbulence in the stock market.
Widespread layoffs picked up steam nationwide this summer, shocking many workers who had gotten comfortable with the Great Resignation era of solid job prospects. By June, major brands in tech, manufacturing and finance had announced job cuts and hiring freezes. Federal Reserve Chair Jermone Powell admits that his agency’s hiking of the interest rates is a root cause of executives pumping the breaks in certain industries. In short, the Feds are “trying to stabilize a job market that is ‘unsustainably hot,’” including fast-growing wage increases.
“We don’t seek to put people out of work,” he told NPR. “But we also think that you really cannot have the kind of labor market we want without price stability.”
How is that Affecting Austin Jobs?
Austin’s economy is not a mirror image of the nation’s economy as a whole. As it turns out, Austin jobs may not be as negatively impacted by a national recession as other areas in the country, Michael Brandl, an economics professor at the University of Texas at Austin, told KXAN.
“This is because there is a continued influx of people coming to Austin, a growing tech sector, a robust real estate market and job creation due to more people relocating to the area,” Brandl explains. Luis Torres, a senior business economist with the Federal Reserve Bank of Dallas, agrees. He told the Stateman he wouldn’t be surprised if economic activity in the Austin area decelerates as the U.S. economy loses steam. However, given how strong the local economy has been, he expects it to be a far cry from an actual downturn.
“’Austin will definitely continue to do well’ and probably outperform the national economy, buoyed by a flood of companies that have been relocating or expanding in the area,” the Stateman reports Torres saying.
From The HT Group’s vantage point, we agree. Some sectors are struggling—the downward shift in demand for real estate is hitting some startups hard, for instance. But Austin jobs, in general, are holding stronger than in other areas, and area jobs are even expected to increase by 26% by 2030.
“Samsung alone is a huge reason Austin’s job market is bright,” says The HT Group Executive Recruiter Lori Lankford, referring to Samsung’s new semiconductor manufacturing facility in Taylor, Texas, and potentially more facilities in the coming years. The HT Group is actively recruiting high-tech construction workers for the current Samsung build.
However, this rosy outlook may not provide immediate comfort if you’ve been recently laid off. We get that. If that’s the case, reach out to our recruiters, who can quickly help you find a match among other Austin jobs. And stay tuned to our blog next week for more tips for laid-off workers.