Houston-area employers added a modest 3,600 jobs in May, marking a sharp slowdown in local hiring and falling significantly short of the long-term average, according to new labor market data released by Workforce Solutions – Gulf Coast.
Leisure and Hospitality Sector Boosts Summer Hiring
The Leisure and Hospitality sector led job gains in May, adding 7,600 positions, primarily in restaurants and bars as employers staffed up for the summer season. This figure is well above the sector’s typical May average of 4,400 new jobs.
The Trade, Transportation, and Utilities sector followed, contributing another 3,000 jobs, largely driven by growth in the warehousing subsector.
Professional and Business Services Continues to Slide
Despite gains in other sectors, overall job growth remained weak due to continued losses in the Professional and Business Services sector, which shed 3,200 jobs in May. In addition, April figures for the sector were revised downward by 1,700 jobs, underscoring persistent volatility.
“May’s report reflects a combination of post-pandemic slowing job growth continuing from late last year, and increased economic uncertainty from earlier this spring,” said Parker Harvey, economist at Workforce Solutions – Gulf Coast. He added, “The next few months will be crucial for the direction of Houston’s job market as we’re currently posting sub-30,000 year-over-year job growth, which is about half of our long-term average.”
Construction, Manufacturing, and Government Jobs Decline
Losses were also reported in other major sectors:
- Government: -3,000 jobs
- Construction: -900 jobs
- Manufacturing: -800 jobs
Combined, these three sectors shed 4,700 jobs, further dampening overall growth.
Unemployment Rate Rises to 4.2%
The Houston-area unemployment rate rose to 4.2% in May, up three-tenths of a percentage point from April. The rate is not seasonally adjusted. Meanwhile, Texas’ statewide seasonally adjusted unemployment rate remained steady at 4.1% between March and April.
Looking Ahead
The Texas Workforce Commission will release June employment data on July 18, 2025. For detailed labor market information and the full May report, visit www.wrksolutions.com/localstats.
About Workforce Solutions – Gulf Coast
Workforce Solutions – Gulf Coast is dedicated to keeping the Texas Gulf Coast region a great place to do business, work, and live. Through an employer-driven, people-focused approach, the organization works to elevate the region’s economic and human potential. As the public workforce system for 13 counties in the Houston-Galveston area, Workforce Solutions partners with the Texas Workforce Commission and the statewide Workforce Solutions network to operate Texas’ largest job-matching database: www.WorkInTexas.com.
