Regional Economic Update Kumar's slides.pdf · 2007. 2010. 2013. 2016. Texas. U.S. Percent...
Transcript of Regional Economic Update Kumar's slides.pdf · 2007. 2010. 2013. 2016. Texas. U.S. Percent...
Regional Economic Update
Economic Policy Advisor and Senior EconomistAnil Kumar
Texas economy expanding at a moderate pace but job growth decelerated in Q4
Jobs grew at 2.5 percent annual rate in December 2.4 percent rate in 2018 (faster than 2.1 percent in 2017)
Labor markets remain tight Construction activity softened and house price growth decelerating Wage and price pressures moderating Exports strong despite recent dollar strength Expect 1-2 percent job growth in 2019—slower than 2018
Overview
11.1
17.011.3
-50
-40
-30
-20
-10
0
10
20
30
40
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Manufacturing Production (TMOS)Service Sector Revenue (TSSOS)Retail Sales (TROS)
Index, 3MMA, SA
NOTES: Data through December 2018. Dashed lines are post-recession averages (Jan. 2010-Dec. 2017).SOURCES: Federal Reserve Bank of Dallas Texas Manufacturing Outlook Survey (TMOS), Texas Service Sector Outlook Survey (TSSOS) and Texas Retail Outlook Survey (TROS).
TBOS Headline Indexes Show Signs of Slower Growth
-8
-6
-4
-2
0
2
4
6
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Texas
U.S.
Q/Q job growth, SAAR Texas: 2.5U.S.: 2.1
NOTE: Dashed lines indicate long-run averages (Jan. 1990-Dec 2017).SOURCES: Bureau of Labor Statistics; Texas Workforce Commission; seasonal and other adjustments by FRB Dallas.
Texas Payroll Employment Growing Moderately
1.7 1.32.3
1.0
2.21.4
2.52.0
1.2
4.5
2.43.1
1.82.5
012345
Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18
U.S. TexasM/M job growth, SAAR
3.1
-1.0
3.0 3.34.1
1.6
3.6
6.1
3.4
5.6
-3.0
2.8
1.1 0.9
3.3
1.6
5.8
1.3
3.7
2.1
10.2
-0.3
-4
-2
0
2
4
6
8
10
12
Trade,transp., util.
(20%)
Govt.(15.4%)
Prof. & bus.svcs. (13.9%)
Educ. &health
(13.7%)
Leisure &hosp.
(10.8%)
Mfg.(7.1%)
Fin. act.(6.2%)
Const.(6%)
Other svcs.(3.4%)
Oil & gas(1.9%)
Info. (1.6%)
NOTES: Quarters are Q3 and Q4 2018. Numbers in parentheses refer to share of state employment in December 2018.SOURCES: Bureau of Labor Statistics; Texas Workforce Commission; seasonal and other adjustments by FRB Dallas.
Percent, Q/Q job growth, SAAR
Job Growth Mostly Broad-based Across Sectors
3.1
1.8
3.5
4.9
0.6
3.9
2.8
3.9
1.91.7
1.2
0.2
0
1
2
3
4
5
6
Dallas(21%)
Fort Worth(8.4%)
Houston(24.7%)
Austin(8.5%)
San Antonio(8.4%)
El Paso(2.5%)
NOTES: Quarters are Q3 and Q4 2018. Numbers in parentheses refer to share of state employment in December 2018.SOURCES: Bureau of Labor Statistics; Texas Workforce Commission; seasonal and other adjustments by FRB Dallas.
Percent, Q/Q job growth, SAAR
Q4 Job Growth Slower in Most Metros
3.93.7
3
4
5
6
7
8
9
10
11
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Percent, SA
NOTE: Data through December 2018.SOURCES: Bureau of Labor Statistics; Texas Workforce Commission; seasonal and other adjustments by Federal Reserve Bank of Dallas.
Texas Unemployment Rate Holds Steady and Remains Near Historical Lows
Texas
U.S.
0
1
2
3
4
5
6
7
8
9
10
2011 2012 2013 2014 2015 2016 2017 2018
U.S.
Houston
Texas
San Antonio
Dallas
Austin
Ft. Worth
Months of inventory
NOTE: Data through Dec. 2018.SOURCES: Multiple Listing Service; Texas A&M Real Estate Center.
Existing Home Inventories Edge Up but Remain Still Low
-15
-10
-5
0
5
10
15
20
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Percent, Y/Y, SA
NOTE: Data through October 2018.SOURCE: Standard & Poor's.
Dallas
U.S.
House Price Growth Decelerates More in Texas than U.S.
Most Measures Point to Slower House Price Growth
House Price Changes in Texas and the U.S.Latest Period Year/Year 2017 Year/Year
Texas U.S. Texas U.S. Texas U.S.FHFA House Price Index (Q3) 4.5 5.1 5.7 6.3 7.7 6.6S&P/Case Shiller Index (Oct.) 3.0 6.1 3.9 5.5 7.7 5.8
MLS Median Sales Price (Dec.) -5.2 -11.3 1.1 1.2 4.3 4.0NOTES: Dallas is used to approximate Texas for the S&P/Case Shiller Index; all data is annualized.SOURCES: FHFA, S&P/Case Shiller, MLS.
1.01.0
0123456789
10
2001 2004 2007 2010 2013 2016
Texas U.S.
Percent seriously delinquent
NOTES: Data through Q3 2018. Seriously delinquent includes 90+ days past due and severe derogatory.SOURCE: Federal Reserve Bank of New York Consumer Credit Panel/Equifax.
Mortgage Loans
8.9
7.8
02468
10121416
2001 2004 2007 2010 2013 2016
Credit Card Loans
13.4
11.4
0
5
10
15
20
2001 2004 2007 2010 2013 2016
Student Loans
5.14.2
0
2
4
6
8
2001 2004 2007 2010 2013 2016
Auto Loans
Delinquency Rates Reflect Still-healthy Household Financial Situation
Percent seriously delinquent
Percent seriously delinquent Percent seriously delinquent
4.54.7
3.1
4.03.8
2.8
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
Wages Input costs (excluding wages) Selling prices
Firms Expect Lower Wage and Price Pressures in 2019
2018 2019 (expected)
Percent
NOTE: Data collected Dec. 18–26, 2018 with 317 firms responding.SOURCE: FRB Dallas Texas Business Outlook Surveys.
521
51.57
35.0
0
20
40
60
80
100
120
140
160
0
200
400
600
800
1,000
1,200
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
TX rig countNatural gas price
Oil price
NOTES: Natural gas price is multiplied by 10. Data through week of January 18, 2018.SOURCES: Wall Street Journal; Baker Hughes; Energy Information Administration.
Rig count, weekly Nominal price, $, weekly
Rig Counts Flatten After Recent Declines in Oil Prices
Energy Sector Business Activity Slowed Significantly in Q4
-50
-40
-30
-20
-10
0
10
20
30
40
50
2016 2017 2018
Index
SOURCE: Federal Reserve Bank of Dallas Energy Survey.
2.32018:Q4
165.1
275.9
120.4
80
90
100
110
120
130
140
80
100
120
140
160
180
200
220
240
260
280
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
U.S. ex. Texas
Texas
Index, January '00=100, SA
NOTE: Exports lines through October 2018, value of the dollar line through November, and pie charts refer to Q3 2018.SOURCES: U.S. Census Bureau; WISERTrade.
Texas trade-weightedvalue of the dollar
Index, January '00=100, SA
33.7
21.913.2
12.8
8.65.44.4
MexicoAsia, excl. ChinaLatin America, excl. MexicoEUCanadaChinaOther19.9
17.9
15.114.7
7.6
7.4
17.6
Oil and gasPetroleum and coal productsChemicalsComputers and electronicsTransportation equipmentMachinery, excl. electricalOther
Texas Exports Pick Up Despite Stronger Dollar
14.06.8
-3.5
-80
-60
-40
-20
0
20
40
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
General Business Activity (TMOS)General Business Activity (TSSOS)General Business Activity (TROS)
NOTES: Data through December 2018. Dashed lines are post-recession averages (Jan. 2010-Dec. 2017).SOURCES: Federal Reserve Bank of Dallas Texas Manufacturing Outlook Survey (TMOS), Texas Service Sector Outlook Survey (TSSOS), and Texas Retail Outlook Survey (TROS).
Index, 3MMA, SA
Perceptions of Broader Business Conditions Moderate Significantly
Texas economy expanding at a moderate pace but job growth decelerated in Q4
Labor markets remain tight House price growth decelerating Wage and price pressures expected to moderate in 2019 Lower oil prices likely to affect energy sector activity Expect 1-2 percent job growth in 2019—slower than 2.4 percent in
2018 Key downside risks: Lower oil prices, higher rates, strong dollar, labor supply
constraints, tariffs, and trade policy uncertainty
Summary
3.7 3.8 3.9 4.1 4.4 4.7
7.4 7.5
0
1
2
3
4
5
6
7
8
9
10
U3(total unemployed workers)
U3+discouraged workers
U4+marginally attached to
the labor force
U5+part-time for economic
reasons
Broader Measures of Unemployment Well Below Pre-recession AveragesTexas Nov. 6MMA
Texas Pre-recession avg. '00-'06
U.S. Nov. 6MMA
U.S. Pre-recession avg. '00-'06
Percent
NOTES: Data through November 2018. Discouraged workers calculated as a percent of the civilian labor force plus discouraged workers. Marginally attached workers calculated as a percent of the civilian labor force plus all marginally attached workers. Part time for economic reasons calculated as a percent of the civilian labor force plus all marginally attached workers. U6 (Broader unemployment rate) equals U3 plus discouraged workers plus marginally attached plus part time for economic reasons.SOURCES: BLS/CPS.
0
10
20
30
40
50
60
70
0
100
200
300
400
500
600
700
'00 '02 '04 '06 '08 '10 '12 '14 '16 '18
Texas
U.S.
NOTES: Data are through January 12, 2019. Dashed lines are pre-recession averages (2000-2006).SOURCE: United States Department of Labor.
Thousands, 4WMA, SA Thousands, 4WMA, SA
Low Initial Unemployment Claims Reflect a Tight Labor Market
90
100
110
120
130
140
150
160
170
180
190
200
2011 2012 2013 2014 2015 2016 2017 2018
Index, Jan. '11=100, 6MMA
NOTE: Data through Dec. 2018.SOURCES: Multiple Listing Service; Texas A&M Real Estate Center.
Existing-Home Sales Moderated Significantly in 2018
Ft. WorthAustin
San Antonio
Houston
TexasDallas
U.S.
15.0
10.512.9
-40
-30
-20
-10
0
10
20
30
40
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Current selling price (TROS)
Current price finished goods (TMOS)
Current selling price (TSSOS)
Index, 3MMA, SA
NOTES: Data through Dec. 2018. Dashed lines are post-recession averages (Jan. 2010-Dec. 2017).SOURCES: Federal Reserve Bank of Dallas Texas Manufacturing Outlook Survey (TMOS), Texas Service Sector Outlook Survey (TSSOS), and Texas Retail Outlook Survey (TROS).
TBOS Price Indexes Suggest Price Pressures Easing
29.0
20.316.1
-30
-20
-10
0
10
20
30
40
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Current Wages and Benefits (TMOS)
Current Wages and Benefits (TSSOS)
Current Wages and Benefits (TROS)
Index, 3MMA, SA
NOTES: Data through Dec. 2018. Dashed lines are post-recession averages (Jan. 2010-Dec. 2017).SOURCES: Federal Reserve Bank of Dallas Texas Manufacturing Outlook Survey (TMOS), Texas Service Sector Outlook Survey (TSSOS), and Texas Retail Outlook Survey (TROS).
TBOS Wage Indexes Ease but Remain Above Average
101
112
70
75
80
85
90
95
100
105
110
115
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Index, January '07 = 100
NOTE: Texas data through Dec. 2018; U.S. through Nov.SOURCES: Conference Board; FRB Dallas.
Texas
U.S.
Texas Leading Index Points to Slower GrowthThree-month percent change
*Estimated December value.NOTE: Change from Sept. to Dec. 2018.SOURCE: FRB Dallas.
-4 -3 -2 -1 0 1
Real oil price
Texas Stock Index
Texas value of the dollar*
New unemployment claims*
Help-wanted index
Well permits
U.S. leading index*
Average weekly hours
Net change in Texas Leading Index*
Labor Force Participation Rate
63.8
63.1
62
63
64
65
66
67
68
69
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Percent
Texas
U.S.
NOTE: Dashed lines refer to pre-recession averages (Jan. 2000 – Dec. 2006).SOURCE: Bureau of Labor Statistics.
Employment to Population Ratio
61.4
60.6
58
59
60
61
62
63
64
65
66
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Percent
Texas
U.S.
NOTE: Dashed lines refer to pre-recession averages (Jan. 2000 – Dec. 2006).SOURCE: Bureau of Labor Statistics.
132.7
90.173.572.1
20
40
60
80
100
120
140
160
180
200
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Multifamily permitsReal residential contract valuesHousing startsSingle-family permits
Index, January '06=100, 5MMA
NOTE: Permits and housing starts through October, contract values through November 2018. SOURCES: Bank of Tokyo-Mitsubishi; U.S. Census Bureau; F.W. Dodge.
Residential Construction Activity Softens
14.3
7.2
-50
-40
-30
-20
-10
0
10
20
30
40
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
New Orders (TMOS)Growth Rate of Orders (TMOS)
Manufacturing Demand Growth DeceleratesIndex, 3MMA, SA
NOTES: Data through December 2018. Dashed lines are post-recession averages (Jan. 2010-Dec. 2017).SOURCE: Federal Reserve Bank of Dallas Texas Manufacturing Outlook Survey (TMOS).
Oil Price Expectations for 2019 Remain Disperse
0
5
10
15
20
25
30
35
< 50 50.00–54.99 55.00–59.99 60.00–64.99 65.00–69.99 ≥ 70
Percent reporting
NOTES: Executives from 160 oil and gas firms answered this question during the survey collection period, Dec. 12–20, 2018. For reference, WTI (West Texas Intermediate) spot prices averaged $49.22 per barrel during the period.SOURCES: Federal Reserve Bank of Dallas Energy Survey; Energy Information Administration.
Dollars per barrel