top of page

Mobility and Job Growth: Examples from the U.S. and Texas Metros

About the Data and Chart: The chart shows the Mobility and Engagement Index (MEI) and Employment growth index (Dec 2019 = 100) for the U.S. and selected Texas metros. Employment index charts are quite common, but MEIs need a bit of an explanation. The Dallas Fed MEI summarizes the information in seven different variables, based on geolocation data collected from a large sample of mobile devices, to gain insight into the economic impact of the pandemic. The MEI uses SafeGraph data on a range of spatial behaviors of mobile devices. According to the Dallas Fed, about seven variables are combined via principal component analysis, which extracts a weighted average that best explains their variation. The resulting combination is the county-level MEI, which is then aggregated to the metropolitan statistical area (MSA) and state and national levels. All indices are scaled so that the national index averages zero over January-February and is -100 for the week ending on April 11. Regions with values less than -100 indicate their mobility fell more than the national average.

Summary Explanation

  • It is very common in the areas of social science (economics) to test relationships, even if the results are quite evident like the one we are presenting here. We know the U.S. economy started to shut down during March 2020, limiting mobility of people outside their homes. Since then, there’s been a gradual re-openings of the economy. The strength of the local economy, job growth for example, since the pandemic is measured by the mobility of the population. Though getting out of the house does not automatically mean engaging in an economic activity 100% of the time, it is true a large percentage of the time. Also, though the impact of MEI to labor markets are high, there are nuances of MSAs that play a large part.

  • About the Statistics: Correlation between the U.S. MEI and Job Growth stands at 87% with R-Square (R-SQ) of 76%. Though correlation does not mean causation, in this case, it’s safe to say mobility is the driver of job growth. R-SQ tells us that 76% of the time, the movement of job growth could be explained by mobility. Those of you in the academic field know these are high numbers, as 20% R-SQ tend to be acceptable to explain complex phenomena.

  • In selected Texas metros, San Antonio leads in the correlation and R-SQ categories, followed by Austin. The selected Texas metros have their own unique labor market and demographic characteristics, resulting in different statistics.

  • Results of Texas metros vs. the U.S.: During the pandemic, the selected Texas metros monthly total employment dropped by 11.1%, about 350 basis points less than the U.S. However, monthly job growth during recovery in the U.S. from May through August averaged 2%, about 60 basis points higher than the average among the selected Texas metros. During the same time period, selected Texas metro’s MEI lagged the U.S. average. But wasn’t Texas one of the early openers of the economy?

  • Conclusion: Cutting through the clutter:

    • Stability surrounding COVID-19 is the major driver. Currently, the underlying strength of the economy is in the back-burner, as economic activity is driven by stability surrounding COVID-19, or who can best manage the virus. Once the virus is controlled, the diverse economy of the DFW metro area will lead the nation in job production. Austin, with its highly educated labor force and tech domination, will produce sizable jobs going forward. San Antonio’s Leisure and Hospitality industry will be helped by “Stay-cation” starting next year. Without minimizing Houston’s dependence on oil and gas, the metro’s economy is getting more diversified. Starting next year, Houston’s labor force is expected to serve other industries besides oil and gas. Expect DFW and AUS to recover lost jobs during pandemic about a year earlier than the U.S., where as SAZ and HOU to recover with the U.S.

    • The reason why the selected Texas metros economy lagged behind the U.S. after re-opening is because the number of virus cases went up in these metros. The number of virus cases, MEI, and job growth tell us that we are getting impacted by demand factors, not supply as most businesses are ready and able to open. Without getting too deep into the Classical vs. Keynesian debate, Say’s Law, “Supply creates its own demand” fails during this pandemic thus focus should be paid to solve the demand side of the equation.

    • Since MEI is produced weekly, it does act as an early indicator for the labor market. For example: BLS job growth by metro area for August will be out towards the end of September but MEI is out already. So, economic forecasters can derive job growth by metro using MEI as an independent variable.



bottom of page