April 2018 Summary1
Increased activity in the energy and manufacturing industries advanced the Texas economy. Improved employment opportunities expanded the workforce, translating into accelerated economic activity. Texas led the nation in job creation this month with 39,600 new jobs, and initial unemployment insurance claims relative to the size of the workforce reached a record low. Real earnings, however, remain suppressed and present a growing challenge to Texas as well as the nation. Upward momentum in goods-producing and technology-based industries should eventually stimulate wages. Threats of retaliatory trade barriers on U.S. goods, however, pose a serious threat to Texas’ current rate of growth.
Spurred by widespread employment gains, the Dallas Fed’s Business-Cycle Index jumped above 5.5 percent on a quarterly seasonally adjusted annualized rate (SAAR). The largest increase since 2014. Growth in the energy industry pushed the Houston economy up 7.6 percent SAAR despite fading hurricane-related reconstruction stimuli. Austin’s booming technology industry supported 7 percent growth through the first four months of the year. North Texas’ expansion was more modest at 5.4 and 3.9 percent growth in Dallas and Fort Worth. While the San Antonio economy grew just 2.6 percent amid weak hiring activity.
The economic expansion should continue as the Texas Leading Economic Index (a measure of future directional changes in the business cycle) rose 5.7 percent year over year (YOY) to a new cycle high. Higher oil prices, low unemployment, and growth in the national economy signal favorable economic conditions as the year progresses. Despite favorable economic data, the Texas Consumer Confidence Index dipped for the second straight month amid rising trade tensions and NAFTA uncertainty. International commerce is a critical component to the Texas economy, supporting over 900,000 jobs in primarily higher-wage manufacturing subsectors.
For more information about the Texas Economy:
Click to read at www.recenter.tamu.edu
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