Texas unemployment rate hits worst on record at 12.8%

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The state’s April jobless rate was 12.8% — Texas’ worst monthly tally on record.

That number, included in the Labor Department’s monthly report released Friday, is the government’s clearest and most comprehensive look at the economic devastation in Texas since the coronavirus pandemic first swept the state in March.

Previously, the state’s worst-ever monthly unemployment rate was 9.2% in November 1986, as Texas reeled from the last big oil bust. Now, with more than 2 million Texans who have filed for unemployment during the outbreak, the contracting oil industry is only part of the state’s economic problems.

“We are in some sense a state having to deal with two extraordinarily negative circumstances all at once,” Venkatesh Shankar, an economist and director of research at the Center for Retail Studies at Texas A&M University, said in an interview.

And perhaps no economic indicator matters as much as the public health data related to COVID-19. In explaining his rationale for allowing businesses to reopen, Abbott has zeroed in on two figures. One is the ratio of positive cases to tests conducted. The other is the hospitalization rate — the proportion of infected Texans who are requiring hospitalization.

Both those numbers have trended down over several weeks, but Texas is still often seeing 1,000 or more people test positive for the virus each day.

“We never had a steep rise, but we haven’t hit anywhere near a plateau,” Shankar said. “The question is: You have to open the economy to a certain extent. When the economy starts to come back and cases come back again, how will unemployment be affected then?”

Economists have said Texas could struggle to bounce back from the economic calamity caused by COVID-19 even though businesses across a wide swath of industries are allowed to reopen because of the double whammy Shankar described the coronavirus leading to shuttered businesses combined with weak oil prices.