"Texas economy’s expansion continues," says Dallas Fed economist
For Immediate Release: March 30, 2018
DALLAS—Texas’ economic expansion continues, with job gains widespread across metros and industries, said senior business economist Jesus Cañas in the Federal Reserve Bank of Dallas’ latest Texas Economic Update.
State employment increased by about 3.2 percent in February, with particularly strong growth seen in the energy sector, as well as professional and business services and construction, according to Cañas. Unemployment remained steady at 4.0 percent, near its historic low and below the nation’s 4.1 percent rate.
With the unemployment rate so low, some executives have reported difficulty hiring. This was seen in responses to supplemental questions in the Texas Business Outlook Surveys (TBOS) in February, Cañas said.
“More than half of the business executives in our Texas Business Outlook Surveys say they plan to increase employment over the next six to 12 months,” he said. “However, 65 percent of them reported difficulties finding qualified workers. The problem persisted across skill levels but was mainly concentrated among mid-skill positions, which typically require some college or technical schooling.”
Consistent with tighter labor conditions, wages grew faster in Texas than they did nationally in 2017, and expectations for 2018 wage growth are bullish in the latest TBOS surveys.
Nevertheless, labor market tightness “could restrict stronger economic growth going forward,” Cañas said, as could uncertainty about trade negotiations.
“Lack of clarity on trade policy could lower optimism among Texas firms, limiting investment plans for 2018,” he said.
Potential tailwinds for the Texas economy include recent federal tax law changes, which are projected to boost investment, Cañas said.
“In addition, global economic growth continues to improve, and that could benefit Texas exports,” he said.
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Media contact:
Jennifer Chamberlain
Federal Reserve Bank of Dallas
Phone: (214) 922-6748
E-mail: jennifer.chamberlain@dal.frb.org