Texas Economic Indicators

June 28, 2024

The Texas economy posted above-average job gains in May, with employment expanding in every major metro. Texas private hourly earnings dipped last month but were up from year-ago levels. The Texas Business Outlook Surveys (TBOS) indicated that input and selling prices continued to rise in June. Texas exports climbed in April, and the May Banking Conditions Survey reported a slight increase in loan volumes.

Labor market

Texas employment growth outpaces U.S. through May

Texas employment expanded an annualized 2.8 percent in May (32,700 jobs) after increasing 3.4 percent in April, which was revised downward. U.S. payrolls rose an annualized 2.1 percent. Year-to-date through May, Texas grew 2.8 percent, ahead of the nation's 1.9 percent increase, with strong job gains seen in the state's leisure and hospitality and other services sectors, while trade, transportation and utilities, government, and education and health services posted slower growth than the nation (Chart 1). Employment in the Texas oil and gas sector is down year to date, while growth in information services has been subdued. The Dallas Fed's Texas Employment Forecast was revised down to 2.4 percent job growth this year (December/December).

Payrolls expand in major metros

May employment growth was solid across the major Texas metros (Chart 2). Dallas and Austin led job growth, with payrolls increasing an annualized 2.9 percent for both metros. McAllen followed closely, posting a 2.7 percent increase. Payrolls rose 2.3 percent in San Antonio, 1.9 percent in Houston and 1.3 percent in both Fort Worth and El Paso.

Texas private earnings dip in May

Texas private hourly earnings dropped to $32.54 in May (Chart 3). Meanwhile, private hourly earnings in the U.S. rose to $34.91 in May. Year over year, Texas wages were up 5.5 percent in May, outpacing the nation's 4.1 percent increase.

Texas Business Outlook Surveys

The Texas Business Outlook Surveys price indexes were positive and generally rose in June, indicating continued growth in input costs and selling prices (Chart 4). The manufacturing survey index of prices paid for raw materials increased to a reading of 21.5 and the prices received index climbed to 14.4. The service sector input prices index rose to 24.7, and the service sector selling prices index remained at 3.8.

Exports

Texas exports expanded 6.5 percent in April (Chart 5). On a smoothed basis (three-month moving average), exports to Texas' largest trading partners were mixed. Exports rose 4.3 percent to Asia (excluding China), 2.1 percent to Mexico and 0.6 percent to Latin America (excluding Mexico). Meanwhile, exports to China fell 3.1 percent, and exports to Europe were down 5.0 percent.

Banking Conditions Survey

The Dallas Fed's Banking Conditions Survey suggested slight growth in total loan volumes in May. However, volumes for various loan types contracted, but at a slower pace than April (Chart 6). The total loan volume index jumped 14.3 points to 5.6. Meanwhile, the commercial and industrial index was -5.9, the commerical real estate loan index was -4.6 and the consumer volume index was -9.9, all posting their 14th consecutive negative readings. The residential real estate loan volume index improved but remained in negative territory at -1.5.

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