DALLAS MORNING NEWS

Tuesday, November 24, 2009

By BRENDAN CASE and STEVE BROWN / The Dallas Morning News

The Texas economy threw off mixed signals in October, with expanding payrolls but a rising unemployment rate.

Employers boosted payrolls by a preliminary count of 41,700 jobs last month – a significant piece of good economic news after a year of nearly uninterrupted monthly job losses.

But the unemployment rate edged up to 8.3 percent from 8.2 percent in September, the Texas Workforce Commission said Friday.

The state has lost more than 300,000 jobs over the last year, and Waco economist Ray Perryman described the October report as a "pleasant surprise." He warned, though, that it's too early to say the positive number marks the beginning of sustained job growth.

"It is certainly too early to call this number a trend," he said. "I do not think we are yet at a point where we can count on job growth every month, but we should begin to see an overall pattern of gradual increase with more up months than down."

How could the jobless rate rise when the economy added jobs?

Payroll employment and the unemployment rate tend to track each other over time, with the jobless rate typically going down when job creation increases.

But the two indicators are based on separate surveys, and it's not uncommon for them to move in seemingly contradictory directions in a particular month.

Moreover, if employers continue to add jobs, more people could come back into the labor force to look for work. That could cause the unemployment rate to rise even while the economy is recovering.

In October, job gainers included education and health services, where employers added 14,900 positions, and professional and business services, up 10,800 jobs. Employers added 4,500 jobs in financial activities.

Employers cut only 200 manufacturing jobs in October, after slicing much more deeply earlier in the year. But the construction industry shed another 9,400 jobs last month.

Texas was not the only state to add jobs in October – in fact, two of the nation's most economically troubled states also posted employment gains. Michigan picked up 38,600 jobs, while California added 25,700, according to the U.S. Bureau of Labor Statistics.