Texas Economic Outlook Feb 12

Created Wednesday, 17 February 2010 15:22

Updated February 12, 2010

Economic Progress Report

(Change from previous year)

Unemployment Rate Increasing
Nonfarm Employment Decreasing
Sales Tax Collections, Retail Establishments Decreasing
Texas Leading Indicator Index ο Stable
U.S. Gasoline and Diesel Retail Prices Increasing

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Texas Economic Outlook

The Texas economy, the world’s 12th-largest, continues to fare better than those of many other states. But Texas felt the effects of the worldwide recession during 2009.

According to the National Bureau of Economic Research, the U.S. economy peaked in December 2007 and entered recession. The Texas economy continued to grow through most of 2008, with employment peaking in October that year, then Texas joined the nation in losing jobs. During 2009, Texas’ gross state product (GSP) declined more slowly than the U.S. economy (-1.7 percent versus -2.5 percent.)

Despite the state’s economy contracting in 2009, Texas’ relative economic advantage should continue as the state and U.S. economies turn around and expand again in 2010. Although job growth will continue to lag the renewed expansion of economic production, the Comptroller’s office estimates that the Texas’ GSP will grow by 2.6 percent during calendar 2010. The U.S. economy should grow at a slower rate of 2.0 percent during the year.

Jobs

  • Texas lost 23,900 jobs in December 2009, following two consecutive months of job gains totaling 73,000.
  • Texas’ December 2009 unemployment rate was 8.3 percent, up from 8.0 percent in November. The January U.S. rate was 9.7 percent, down from 10.0 percent in December.
  • The U.S. lost 4.0 million jobs from January 2009 to January 2010.
  • The Texas unemployment rate has been at or below the national rate for 36 consecutive months.
  • In the 12 months ending in December 2009, Texas lost 275,900 jobs.

Housing

  • Thus far, Texas has weathered the national real estate crunch without significant damage to property values but sales and construction activity have slowed. Despite its continuing resiliency, Texas is not immune from the national real estate crunch.
  • 5,048 building permits for single-family homes were issued in December 2009. The number of permits in the 12 months ending in December 2009 was 63,595, a decrease of 15 percent from the period one year earlier.
  • Multi-family building permits are down, from 2,351 units in December 2008 to 993 units in December 2009. The number of permits issued in the 12 months ending in December 2009 was 16,541, a decrease of 66 percent from the period one year earlier.
  • In December, sales of existing single-family homes in Texas rose year over year for the fourth month since early 2007.
  • In Texas, the median price for existing single-family homes increased by 3.6 percent from December 2008 to December 2009.
  • The Texas foreclosure rate has remained largely stable for the past three years. Texas experienced 12,225 foreclosure filings in January 2010.
  • In January 2010, the Texas foreclosure rate was one in every 785 mortgages. This was substantially better than Nevada’s one in 95, Arizona’s one in 129 and both Florida and California at one in 187.

Consumer Confidence Index

  • Consumer confidence has rebounded by 50 percent nationwide, but still remains pessimistic at a level of 55.9, which is more than 44 percent below its 1985 baseline level. Texas and surrounding states fared better than the rest of the nation. Texas’ regional index rose to 71.9, 9.4 percent higher than January 2009.

Oil and Natural Gas

  • The all-time high crude oil closing price was $145.29 on July 3, 2008.
  • Crude oil futures closed at $75.28 per barrel on February 11, 2010, more than double the level of one year ago. Last winter’s lowest price was $33.98 in February.
  • In fiscal 2008, production tax collections for natural gas were up 42 percent over fiscal 2007. Tax collections for oil were up 72 percent.
  • By contrast, in fiscal 2009 production tax collections for natural gas were down 48 percent over fiscal 2008. Tax collections for oil were down 39 percent.
  • Natural gas and oil production tax collections are significantly lower for the first five months of fiscal year 2010 over fiscal year 2009.

Taxes

  • Texas sales tax receipts for January 2010 were down 14.2 percent from January 2009.
  • For fiscal 2009, state sales tax receipts are down 2.7 percent from fiscal 2008.
  • Motor vehicle sales tax collections for fiscal 2009 were $2.569 billion, down 22.5 percent over fiscal 2008 amount.
  • The nationwide core transaction price for a new car or truck during the first 15 days of January 2010 rose 2.73 percent to $25,631 from $24,949 in January 2009.
  • For the first 15 days of January 2010, total national industry auto sales were 568,965 units, up 32.3 percent compared to first 15 days of January 2009.
  • Nationally, the lease share of new vehicle purchases increased to 24.0 percent of new vehicle purchases; that’s 8.0 percent higher than in January 2009.

Stimulus Package

  • In Texas, an estimated $18 billion in federal stimulus money is flowing to state and local governments. The Comptroller’s office is tracking the $14.3 billion that comes through the state Treasury. The Comptroller’s analysis is ongoing. For the latest information, visit our ARRA Web site, A Texas Eye on the Dollars.

Cap and Trade

  • Efforts to reduce greenhouse gas emissions could negatively impact the Texas economy. The state could see 173,000 to 425,000 fewer jobs than expected in 2030 as a result of increased energy prices from the cap and trade portion of the recently proposed bill. The resulting decline in gross state product is estimated to be between $25 billion and $58 billion.
  • The Comptroller’s office is continuing to analyze potential implications and assess how green jobs and energy efficiency programs in the proposals could offset negative impacts. For the latest information, visit our Cap and Trade Web page.

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