Waco is one of 381 Metropolitan Statistical Areas (MSAs) in the nation. In 2013 Falls County was added to McLennan County for a combined population of 258,974 persons that ranked 180th in the nation. In 2013, Waco’s average per capita personal income (PCPI) of $35,922 (reported in November 2014 by the U.S. Bureau of Economic Analysis.) ranked 284th in the United States and amounted to 80 percent of the national average of $44,765. Over the ten-year period from 2003-2013 the gap narrowed between Waco’s average personal income per capita and the average of all U.S. metro areas with an average annual growth rate locally of 3.6% compared to with 3.2% nationwide.
In addition to higher PCPI the Waco economy is experiencing growth in employment. Figure 1 shows seasonally-adjusted quarterly household employment since 2000, a period that included recessions in 2001 and 2008-09. Over the 15-year period Waco employment increased at an average annual rate of 0.4% that is the same average since the beginning the 2008-09 recession. However, over the six quarters ending in 1st quarter 2015 employment increased at an annual rate of 1.7%, completely closing the gap with the past fifteen-year trend and setting the stage for faster growth in the future. Projected household employment will continue to grow next year an annual pace well above the trend rate.
Source: U.S. Bureau of Labor Statistics
Waco MSA Unemployment Rate
The BLS household survey is used to measure the unemployment rate equal to the percentage of unemployed persons in the labor force that consists of area residents above age 16 who are either employed or actively seeking employment and are not serving in the military or otherwise institutionalized. The local labor force can change due to demographic trends, net migration, and the presence of workers who may be encouraged or discouraged from seeking employment based on local job opportunities, skill and education requirements, geographic access, length of time unemployed, and other cyclical and structural forces. Some of these forces changed in 2013 when Falls County was added to McLennan County as part of the Waco MSA.
The Waco seasonally-adjusted labor force, employment, and the unemployment rate for each quarter since 1st quarter 2013 are shown in Table 1. The quarterly average unemployment rate decreased over the two-year period from 6.8% in first quarter 2013 to 4.4% in first quarter 2015. This decline in the unemployment rate has not always been the result of employment growth, but it also reflects change in the labor force that decreased during the fourth quarter in 2013 and 2014 by more than the decrease in employment. However, in the first three quarters of 2014 and the 1st quarter of 2015 employment growth exceeded positive growth in the labor force.
Changes in the labor force due to regional migration as well as the labor participation rate make it difficult to rely solely on the unemployment rate to measure cyclical performance. This is especially true in Texas where economic growth has occurred more rapidly in oil producing areas.
Waco MSA Annual Percent Change in Seasonally-Adjusted
Labor Force and Employment, and the Unemployment Rate
Unemploy- ment Rate
Source: U.S. Bureau of Labor Statistics
Table 2 shows the considerable variation in 1st quarter labor force and employment growth rates among the 25 Texas metro areas. Despite the variation among geographic areas the unemployment rate in every Texas metro area decreased during 1st quarter 2015 compared with the same period in 2014, lowering the Texas State average to 4.3 percent.
Both the Waco and the Killeen-Temple metro areas experienced slower growth in the labor force along with positive growth in employment that lowered their unemployment rates to 4.2% and 4.9%, respectively.
The Killeen-Temple area is facing the economic impact of defense budget cuts and the uncertainty of a potential loss of future troop, civilian workers, and family members totaling over 40,000 in an immediate “area of influence” population of nearly 420,000 persons. Certainly, the entire Central Texas region would be impacted by future household location decisions.
Annual Percent Change in Texas Metro Area 1st Qtr. 2014 and 2015 Labor Force and Employment and Quarterly Average Unemployment Rates