Austin unemployment has, for the past several quarters, held onto either side of seven percent. This is historically high for the region, but remains reasonably below the national unemployment rate of 8.5 percent as of December. Austin payroll employment is estimated to have grown 1.8 percent in 2011, compared to 1.0 percent nationally This is impressive given the proportion of Austin jobs, roughly 22 percent, concentrated in the government sector. Nationally, the government sector accounts for about 17 percent of all jobs. As federal spending tightens in 2012 and 2013, and state and local governments look to trim budgets, government employment in the area faces downside risk. Because of the heavy weight of these jobs locally, there is the risk that job cuts could drag on the overall Austin economy. Other industries such as health care and technology, however, look to be heating up. And with a large base of young, educated workers to draw upon, Austin is well-positioned to attract new businesses.
Personal income growth in Austin, which cratered after the tech bust of the 2001 recession, remained impaired during the Great Recession, declining 8.0 percent peak-to-trough. This is compared to a national decline of 5.6 percent peak-to-trough. Since bottoming out in the fourth quarter of 2009, incomes in Austin have risen more than 10.8 percent, two percentage points better than nationally, but trailing overall Texas income growth by two percentage points over the same period.
Strong population growth in the range of three percent annually has added support to the Austin housing market. Without a significant overbuilding of homes, Austin home prices have been mostly insulated from the declines seen in other areas. Compared to the national home price decline of 4.5 percent, Austin home prices are forecast to have declined only 1.5 percent in 2011.
Click here for the complete Austin MSA Regional Economic Update, with a forecast table and charts of regional economic activity: Austin2012Q1.