Texas Economic Indicators

October 02, 2024

The Texas economy continued to expand in August. Employment growth strengthened, while the unemployment rate held steady. The Texas Business Outlook Surveys headline indexes showed weakness in manufacturing but a pickup in service sector growth in September. Exports dipped in July. Home sales and housing permits fell in August, while retail sales tax collections were relatively flat.

Labor market

Texas employment expands strongly

Texas employment surged an annualized 7.3 percent in August (83,200 jobs) after declining the prior two months. All sectors apart from oil and gas grew faster than the nation, especially in leisure and hospitality, manufacturing, financial activities and construction-all growing more than 10 percent (Chart 1). The September Dallas Fed's Texas Employment Forecast for 2024 was revised to 2.2 percent (December/December).

Texas unemployment rate unchanged

The Texas unemployment rate held steady at 4.1 percent in August, while the U.S. jobless rate ticked down to 4.2 percent (Chart 2). Texas' unemployment rates were 3.2 percent for whites, 4.4 percent for Hispanics and 6.4 percent for Blacks in August.

Texas Business Outlook Surveys

The September Texas Business Outlook Surveys reported weakness in manufacturing output and continued growth in the service sector (Chart 3). The manufacturing production index dipped to -3.2 after flat-to-negative readings the previous four months. The service sector revenue index ticked up to 10.1 from 8.7, indicating moderate growth in the sector. The service sector index was in line with its series average, while the manufacturing index remained below.

Housing

Texas existing-home sales fell in August. The three-month moving average declined 2.3 percent (Chart 4). U.S. home sales declined similarly. Mortgage rates have dipped recently but remained elevated, continuing to impact housing affordability. Existing-home inventories in Texas ticked up to 4.4 months of supply in August, their highest level since April 2013. The three-month moving average of Texas single-family housing construction permits fell 1.1 percent in August.

Exports

In July, the three-month moving average of Texas exports declined 0.8 percent, while exports from the rest of the U.S. were flat (Chart 5). The three-month moving average of Texas exports to China decreased 1.9 percent in July; it fell 1.7 percent to Asia (excluding China), decreased 2.4 percent to Latin America (excluding Mexico) and contracted 2.6 percent to Mexico, the state's largest trading partner.

Consumer spending

Texas retail sales tax collections were little changed at $5.0 billion in August (Chart 6). Statewide sales tax collection was 2.3 percent below its peak of $5.1 billion reached in March 2024. Compared with August 2023, real retail sales tax collections were down 0.7 percent, reflective of stable consumer spending.

Public link

Please use the above public link if you want to share this noodl on another website.