Texas Economic Indicators

October 22, 2024

The Texas economy continued to expand in September. Employment growth was robust, and the unemployment rate was unchanged. The Texas Business Outlook Surveys showed continued moderate wage growth, and retail sales tax collections rose in September. Loan volumes fell, the Texas rig count and natural gas prices edged up, and oil prices were stable in early October.

Labor market

Robust employment expansion continues

Texas employment expanded an annualized 2.9 percent in September (34,000 jobs) after strong growth in August. Job growth was widespread in the third quarter, but gains were particularly strong in construction, professional and business services, financial activities and other services-all growing more than 4 percent (Chart 1). The Dallas Fed's October Texas Employment Forecast for 2024 was revised up to 2.5 percent (December/December).

Texas labor force growth rate picks up

In September, the Texas labor force grew an annualized 4.1 percent, and the nation saw a 1.1 annualized percent increase. The 12-month growth rate had been slowing since August 2023 in Texas, though it began edging up in March 2024 and was up 2.1 percent in September-exceeding the nation's 0.5 percent year-over-year growth (Chart 2).

Texas Business Outlook Surveys

The Texas Business Outlook Surveys indicated continued growth in wages in September (Chart 3). The manufacturing survey's (Texas Manufacturing Outlook Survey) wages and benefits index edged down to 18.5 but remained in line with its series average. The service sector's (Texas Service Sector Outlook Survey) wages and benefits index also ticked down, to 12.3 from 14.2. Both indexes suggested a continued moderate pace of wage growth.

Banking Conditions Survey

Total loan volumes declined, according to the Dallas Fed's October Banking Conditions Survey (Chart 4). The decline was generally broad based, with commercial and industrial and consumer loan volumes declining, and commercial real estate lending activity being flat. Meanwhile, residential real estate loan volumes increased, with the index rising 13.5 points to 10.6.

Energy

Oil prices stabilized in early October (Chart 5). As of the week ending Oct. 4, West Texas Intermediate crude was $71.83 per barrel, little changed from September. Natural gas (Henry Hub) rose 62 cents to $2.67 per million British thermal units compared with early September. The number of active rigs in Texas ticked up slightly to 285.

Consumer spending

State sales tax collections reached $5.1 billion in September and were up 2.9 percent from year-ago levels. The three-month moving average of real Texas retail sales tax collections ticked up 1 percent year over year (Chart 6). Relative to the previous month, smoothed retail sales tax revenues in Austin and San Antonio declined, while they rose in Houston and Dallas-Fort Worth.

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