Texas Index Rose in November
The Comerica Texas Economic Activity Index rose at a 3.0% annualized rate in the three months through November and was up 5.9% from a year-ago.
Four of the index’s nine components rose in November. Employment rose by 36,700 on the month—but continuing claims for unemployment insurance also rose, and was above 100,000 for the third consecutive month, painting a mixed picture of the state’s labor market. Seasonally-adjusted active oil-drilling rigs fell for the fourth consecutive month in November with energy prices down from their peaks last summer.
Housing starts fell in November and were roughly 17% below January’s levels. Texas’s housing market is set to be a big drag on the state’s economy, as surging mortgage interest rates and high prices sideline would-be homebuyers. House prices declined for a fifth consecutive month in November, but the pace of declines appears to be moderating. While further price declines are probable in the Lone Star State, they are likely to be shallower than in many other states due to the state’s strong economic fundamentals, such as strong population and employment growth.
Texas GDP jumped 8.2% annualized in the third quarter of 2022, after lackluster growth in the first half of last year. Comerica Texas Index continued to rise in November, indicating economic growth continued in the final quarter of 2022. High inflation, surging interest rates, a softening national economy, and weak economies outside the US will be persistent headwinds to Texas’ economy, likely holding the state’s growth below trend in 2023.
