Comerica Bank’s Texas Economic Activity Index decreased 0.1 points in July to 135.9. July’s index reading is 40 points, or 42 percent, above the index cyclical low of 95.5. The index averaged 128.5 points for all of 2017, 3.9 points above the average for 2016. June’s index reading was revised to 136.0.
The Comerica Bank Texas Economic Activity Index eased by just 0.1 percent in July, essentially unchanged from June. This breaks a three-month winning streak. We expect the Texas Index to return to growth very soon. Over the 12 months ending in July, the Texas Index is up 5.8 percent, consistent with strong real GDP growth for the state during this time span. In July, five out of nine index components were positive. They were nonfarm payrolls, unemployment insurance claims (inverted), housing starts, industrial electricity demand and total state trade. House prices, drilling rig count, hotel occupancy and sales tax revenues were negatives in July. Firmer oil prices in late 2018 and a strong U.S. economy will support an ongoing robust expansion for Texas. Also, the recently completed U.S. trade deal with Mexico removes some uncertainty for Texas businesses. The trade deal remains to be ratified by both countries and may eventually include Canada. Job growth for Texas ticked up this year. Through August, the state has averaged 34,000 net new jobs per month this year, well above the average of 21,000 net new jobs per month for all of 2017. For the first eight months of 2018, the entire U.S. has averaged 208,000 net new jobs per month, so roughly 1 out of every 6 new jobs in the U.S. this year was generated in Texas.
For a PDF version of this article, please click here: Comerica Bank's Texas Index Little Changed
The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.