Texas Sees Surge in Job Losses as Greg Abbott Brags About Economy

As Governor Greg Abbott lauds Texas for surpassing the national economic growth rate, as measured by the state’s gross domestic product, the Lone Star State faces a surge in job losses, primarily in the retail and manufacturing sectors.

Texas saw an unexpected increase of 2,274 initial jobless claims for the week ending March 23, according to data published by the Department of Labor on April 4, casting a shadow over the state’s economic celebrations.

In a broader context, the national landscape mirrors Texas’ labor-market challenges. Total initial jobless claims across the U.S. have risen to 221,000, the new data showed, marking an increase from the previous week’s 210,000 and exceeding analysts’ expectations of 212,000.

Texas’ new unemployment numbers arrived days after Abbott touted the state’s economic resilience and expansion, highlighted by a 5 percent annual growth rate in the fourth quarter of 2023.

Newsweek has contacted Governor Greg Abbott’s office for comment by email.

The contrast of burgeoning jobless claims with a proclaimed economic prosperity raises questions about the underlying health of the state’s economy.

With notable layoffs across several industries and warnings from the Dallas Fed about potential workforce reductions this year, the situation in Texas could be a microcosm of a larger issue that could force the Federal Reserve to begin cutting interest rates as early as June, experts say.

Ian Shepherdson, the chair and chief economist at Pantheon Macroeconomics, told Newsweek via email that WARN notices and Google searches for “layoffs” point to an even greater increase in claims ahead, and a separate measure of hiring intentions is dwindling, suggesting that it may be harder for laid-off employees to find a job quickly.

“As a result, we continue to expect labor-market developments, alongside CPI data, to guide the [Federal Reserve] to start easing in June,” he added.

Texas Governor Greg Abbott at a forum. Companies such as Tramontina USA and Horton Automatics have initiated layoffs, cumulatively affecting thousands of workers.

Justin Sullivan/Getty Images

Despite Abbott’s optimistic outlook, the recent uptick in jobless claims, particularly in sectors integral to Texas’ economic identity—such as retail and manufacturing—signals potential turbulence ahead. Those sectors, historically pillars of the state’s economy, now reflect the vulnerabilities faced by Texan workers.

Abbott’s remarks on April 2 underlined his confidence in the state’s economic direction. “Texas is again outpacing the nation in economic expansion and job growth thanks to the best business climate and the strongest workforce in America,” he said, adding, “As we continue to invest in education, workforce development, and infrastructure, we remain focused on building an even bigger, better Texas for decades to come.”

However, the governor’s statements stand in contrast with the layoffs affecting thousands across the state. Companies such as Tramontina USA, WWL Vehicle Services Americas and Horton Automatics have initiated layoffs, cumulatively affecting thousands of workers. And WARN notices indicate that by May, even more layoffs may be coming to the state.

In December, the Dallas Fed warned about potential workforce reductions for Texas in 2024, predicting a challenging year ahead. The predictions, rooted in analysis of WARN notices and labor-market trends, suggested an uneasy balance between job growth and layoffs in the Lone Star State.

The implications of the layoffs extend beyond immediate job losses and suggest a potential cooling of Texas’ economy. While Abbott champions the state’s GDP growth and job creation, the rising initial jobless claims coincide with the Dallas Fed’s predictions of an unemployment rate growing to about 4.2 percent, up from the current rate of 3.9 percent.