The Texas economy continues to expand at a moderate pace, with payroll employment growing at a 2.1 percent annualized pace in the second half of the year versus the lackluster 0.8 percent rate in the first half. October job growth was subdued, but September data were revised up. The Texas Business Outlook Surveys (TBOS) point to stronger growth in both manufacturing and services in November. The Texas Employment Forecast suggests that job growth for the year will be 1.5 percent (December/December) and that growth next year will be close to the state’s long-term trend rate of 2.1 percent.
The energy sector continues to stabilize as weekly West Texas Intermediate (WTI) crude oil prices have remained above $40 per barrel since mid-April. Mining employment continued to decline in the third quarter but at a much more subdued pace than in the first half of the year. Manufacturing activity has also improved, with the Dallas Fed’s Texas Manufacturing Outlook Survey (TMOS) production index in positive territory for the fifth consecutive month in November. However, the strengthening of the Texas trade-weighted value of the dollar continues to be a headwind to recovery for Texas manufacturers.
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