Your Texas Economy. Current through: Tuesday, Nov 20, 2018

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Meryl Holmes
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1 Your Texas Economy Current through: Tuesday, Nov 20, 2018

2 Overview of Texas Economy The Texas economy is growing robustly in job growth through October is 2.9 percent annualized compared to 2.1 percent in and 2016 job growth was much weaker due to the oil bust (1.3 percent and 1.2 percent, respectively) However, growth is slowing slightly in second half of 2018 Third quarter growth 2.6 percent, down from 3.1 percent in H job growth forecast is 2.9 percent (80 percent confidence interval of 2.5 to 3.3 percent) We are currently growing above our post-recession trend average Texas job growth was 2.3 percent; average real GDP growth 3.5 percent 2

3 Texas Job Growth Surges Ahead of U.S. in 2018 Job growth (percent), Dec./Dec.* Texas U.S *Seasonally adjusted, annualized rate. NOTES: Patterned bar represents Texas annualized Oct. 2018/Dec job growth. Dashed line represents U.S. annualized Oct. 2018/Dec job growth. SOURCES: Bureau of Labor Statistics; Texas Workforce Commission; seasonal and other adjustments by FRB Dallas. DATA: 3

4 Texas Posts Robust Job Growth in 2018 First Half, but Moderates in Second Half Job growth (percent), quarter/quarter* *Seasonally adjusted, annualized rate. NOTES: Patterned bar represents Texas annualized October/September job growth. Dashed line represents U.S. annualized October/September job growth. SOURCES: Bureau of Labor Statistics; Texas Workforce Commission; seasonal and other adjustments by FRB Dallas. DATA: Texas 2.7 U.S

5 Texas Employment Growth Leads U.S. Across Most Industries Job growth YTD 2018 (percent)* Total Trade, Transp. & Util. (19.9%) Gov't (15.4%) U.S. YTD (Oct 2018/Dec 2017) Texas YTD (Oct 2018/Dec 2017) Prof. & Bus. Serv. (13.9%) Educ. & Health Serv. (13.6%) Leisure & Hosp. (10.9%) Mfg. (7.0%) *Seasonally adjusted, annualized rate. NOTE: Numbers in parenthesis indicate share of total state employment. SOURCES: Bureau of Labor Statistics; Texas Workforce Commission; seasonal and other adjustments by FRB Dallas. DATA: Fin. Activ. (6.2%) Constr. (6.0%) Info. & Oil & Gas, Other Svcs Mining (5.1%) Sup. (1.9%) 5

6 2018 Texas Employment Growth Broad-based, Led by Energy Job growth (percent), Dec./Dec.* YTD (Oct 2018/Dec 2017) Total Trade, Trans. & Util. (19.9%) Prof. & Bus. Serv. (13.9%) Educ. & Health Serv. (13.6%) Leisure & Hosp. (10.9%) Mfg. (7.0%) Fin. Act. (6.2%) Constr. (6.0%) *Seasonally adjusted, annualized rate. NOTES: Patterned bar represents annualized October 2018/December 2017 job growth. Numbers in parenthesis indicate share of total state employment. SOURCES: Bureau of Labor Statistics; Texas Workforce Commission; seasonal and other adjustments by FRB Dallas. DATA: Oil & Gas Extract. & Mining Sup. (1.9%) 6

7 2018 Job Growth Strong Across Most Major Metros Job growth (percent), Dec./Dec.* YTD (Oct 2018/Dec 2017) Texas Austin Dallas Fort Worth Houston San Antonio *Seasonally adjusted, annualized rate. SOURCES: Bureau of Labor Statistics; Texas Workforce Commission; seasonal and other adjustments by FRB Dallas. DATA: 7

8 Texas Unemployment Rate Hits Historic Low Unemployment rate (percent) U.S Texas NOTES: U.S. and Texas data through October SOURCES: Bureau of Labor Statistics; Texas Workforce Commission; FRB Dallas. DATA: 8

Jobs (millions)* 13.4 13.2 13.0 12.8 12.6 12.4 12.2 12.0 11.8 11.6 11.4 11.2 2018 Job Growth Forecast 2.9 percent (2.5 3.3) Texas job growth expected to be about 2.

9 Jobs (millions)* Job Growth Forecast 2.9 percent ( ) Texas job growth expected to be about 2.9 percent in 2018 Dallas Fed Employment Forecast *Seasonally adjusted. NOTES: Observed employment data through October Upper and lower bounds of shaded region represent the 80 percent confidence bands around the forecast. SOURCES: Bureau of Labor Statistics; Texas Workforce Commission; FRB Dallas. DATA: 9

10 ENERGY Texas is #1 producer of oil and natural gas in nation Approximately 30% of U.S. refinery capacity and 75% of U.S. petrochemical production is in Texas Low energy prices hurt Texas economy on net 10

11 Rig Count Flattens After Rising in the First Half of 2018 Dollars Rig Count Texas Rig Count Natural Gas Price Oil Price NOTES: Oil price is dollars per barrel. Natural gas price is dollars per million Btu, multiplied by 10. Data through October SOURCES: Wall Street Journal; Baker Hughes; U.S. Energy Information Administration; Haver Analytics. 0 11

12 MANUFACTURING Texas produces 10% of U.S. manufactured goods Manufacturing sector leading indicator of economic growth Dallas Fed s Texas Manufacturing Outlook Survey offers early look at turning points and insight on trends 12

13 Index, 3-month moving average* Texas Manufacturing Production Growth Robust but Moderating Expansion Contraction Texas Recession Production Oil Bust *Seasonally adjusted. NOTE: Data through October SOURCE: Federal Reserve Bank of Dallas Texas Manufacturing Outlook Survey (TMOS). DATA: 13

14 EXPORTS Texas is the top exporting state and accounts for 19% of U.S. exports Gulf coast ports are major exporters of oil and gas, oil products and petrochemicals Texas-Mexico border ports also process over half of state exports 14

15 Index, Jan. 2007=100* Texas Exports Surge after Energy Bust In Q2 2018, Mexico was Texas top trading partner, receiving 35% of state exports. Texas 100 U.S. minus Texas *Seasonally adjusted, real dollars. NOTE: Data through September SOURCES: U.S. Census Bureau; Wisertrade; Bureau of Labor Statistics; seasonal and other adjustments by FRB Dallas. 15

After Removal of the Oil Export Ban in December 2015, Texas Oil and Gas Exports Surge Index, Q1 2007=100* 3,550 3,050 2,550 2,050 1,550 1,050 550 50 Oil and Gas Petroleum and Coal Products Computers

16 After Removal of the Oil Export Ban in December 2015, Texas Oil and Gas Exports Surge Index, Q1 2007=100* 3,550 3,050 2,550 2,050 1,550 1, Oil and Gas Petroleum and Coal Products Computers and Electronics Transportation Equipment Chemicals Machinery Oil and gas exports surge, now make up 18 percent of Texas exports *Seasonally adjusted. NOTE: Data through Q SOURCES: U.S. Census Bureau; Wisertrade; Bureau of Labor Statistics; seasonal and other adjustments by FRB Dallas. 16

activity in Texas Dallas Fed s Texas Service Sector

17 SERVICES Service industry makes up the bulk of the Texas economy Accounts for over 60% of private-sector activity in Texas Dallas Fed s Texas Service Sector Outlook Survey provides timely insight into this key sector 17

18 Texas Services Revenue and Retail Sales Growth Strong Index, 3-month moving average* Expansion Texas Recession Oil Bust Services Revenue Contraction Retail Sales *Seasonally adjusted. NOTES: Data through October The TROS is a component of TSSOS using information only from retail and wholesale sectors. SOURCES: Federal Reserve Bank of Dallas Texas Service Sector Outlook Survey (TSSOS) and Texas Retail Outlook Survey (TROS). DATA: 18

19 HOUSING Texas house prices have tracked the nation since the Great Recession Single-family housing sector was slow to recover Housing markets currently tight in most of the state 19

20 Texas Home Sales High but Falling, Inventories Tick Up Total existing home sales* 35,000 Months in inventory* 9 30,000 25,000 20,000 15,000 Home sales Inventory , *Seasonally adjusted. NOTE: Data through September SOURCES: Multiple Listing Service; seasonal and other adjustments by FRB Dallas. 0 20

21 Texas Median Home Price Down from Peak Dollars (thousands), four-month moving average* 300 Metro Area September Median Price Y/Y % Change Austin $309, % Dallas $289, % Houston $233, % Ft.Worth $234, % San Antonio $222, % U.S. Texas *Seasonally adjusted. NOTES: Data in real dollars. Data through September SOURCES: Multiple Listing Service; seasonal and other adjustments by FRB Dallas. 21

Your Texas Economy. Last updated: January 30, 2018

Your Texas Economy. Last updated: January 30, 2018 Your Texas Economy Last updated: January 30, 2018 Texas economy strong in 2017 2017 job growth was 2.4% Overview 2015/2016 job growth was much weaker due to the oil bust (1.3% and 1.2%, respectively) 2014