Houston-area employers cut 7,300 jobs in September, a drop that ranks among the steepest the region has seen for that month in more than three decades. The bruising headline number comes with a twist: the area's unemployment rate actually fell, from 5.0% in August to 4.6%.
The 7,300 figure is not seasonally adjusted, according to the Houston Area Employment Situation report from Workforce Solutions. The same report puts seasonally adjusted employment at 3,494,100, down 14,600 jobs from August. It draws on Texas Workforce Commission and Bureau of Labor Statistics data and covers a 13-county region.
Leisure and Hospitality Takes the Biggest Hit
Private employers shed 19,400 jobs in September, and leisure and hospitality had the biggest drop, losing 7,300, KPRC Click2Houston reports. Professional and business services lost 3,900 jobs, and trade, transportation and utilities lost 2,600.
Government payrolls moved the other way, adding 12,100 jobs, largely because of education staffing for the school year. The station also notes that September's decline was the second-largest for the month since 1990.
Why Unemployment Fell Anyway
Houston's unemployment rate in September went down to 4.6%, from 5.0% in August, CW39 reports. The dossier does not explain why joblessness fell while payrolls shrank, so the gap between the two measures remains an open question.
Mohammad Ahmadizadeh, an economist with the Gulf Coast Workforce Board, said the decline was not a surprise, according to ABC13 Houston. He said job ads had slowed and were lower than earlier in the year, and that changing school schedules affected the numbers, with Houston companies hiring fewer workers in September when schools start in August.
The Yearly Employment Picture
Click2Houston reports a gain of 33,600 jobs, or 1 percent, this year. The Dallas Fed puts Houston employment up 9,000 jobs, or 0.3 percent, from September 2025 to September 2026.
The Dallas Fed describes year-over-year growth as meager and says Houston payrolls contracted slightly in the third quarter, down an annualized 0.4 percent. By comparison, state payrolls expanded an annualized 0.2 percent over the same stretch, while national payrolls rose 0.4 percent. Construction was a bright spot, rising 3.8 percent, or 9,800 jobs, over the year, while leisure and hospitality fell 1.4 percent, or 5,200 jobs.
Oil Prices and What Comes Next
West Texas Intermediate averaged $97.31 in September. Ahmadizadeh told ABC13 that higher oil prices benefit the area and add oil and gas industry jobs, which are counted within professional and business services.
Workforce Solutions forecasts about 29,900 jobs added from December 2025 through December 2026, Click2Houston reports. ABC13 adds that economists expect a rebound in the next few months and say retailers will add jobs for the holidays. Economists also cautioned that rising interest rates could eventually affect job growth.
Houston was hardly alone in September, as 23 of Texas' 27 metro areas posted monthly job losses, according to the state labor agency. On the layoff front, about 3,000 were reported in the Houston region over the first nine months of 2026, compared with about 5,200 in the same period last year, per the Houston Chronicle. The available reporting does not tie those layoffs to the September payroll drop.
