The labor market in Dallas-Fort Worth gained momentum during the third quarter of 2023 despite tightening financial conditions and elevated interest rates, leading some industries to outperform others.
Employment in DFW grew at an annualized rate of 5.6% during the third quarter of 2023, which was up from the second quarter’s increase of 4%, according to the latest economic data from the Federal Reserve Bank of Dallas.
In general, DFW gains were widespread across most sectors over the three-month period.
The biggest employment gains were seen in professional and business services (18.5%), education and health services (11.8%), leisure and hospitality (10%), and construction and mining (5.9%). Meanwhile, employment in information services (2.2%) held steady during the quarter, the report states.
Despite achieving a 5.6% growth rate for the quarter, industries like construction and mining, financial activities, and manufacturing all experienced softer growth during the third quarter than in the prior quarter.
Construction and mining grew at an annualized rate of 11.2% in Q2 2023 compared with an annualized rate of 10.3% in Q3. Financial activities and manufacturing also saw more tempered progress during the three-month period, with growth slowing from an annualized rate of 7.9% and 5.4% in Q2 compared with a Q3 rate of 5.2% and 2.9%, respectively.
Part of the reason for the easing in financial, manufacturing, and construction growth in DFW could be due to stricter borrowing costs and lending standards from financial institutions, which can negatively impact how much banks are willing to lend developers and builders, as previously reported by The Dallas Express.
Making up for the difference were gains in areas such as leisure and hospitality, which saw 8.4% growth following -0.4% in the previous quarter.
The local labor market continues to be tight, with the unemployment rate in DFW dipping to 3.8% percent in Q3, which is below the 4.1% state average, according to the report. The labor force expanded an annualized 3.2% in DFW, which was faster than the nation’s 0.6% rise during the same time period.