Texas EiE conomic UdtU pdate · Texas Economic Update • Texas employment grew 2.1 percent in 2011 – Added a total of 197,200 jobs – 256256,100100 private jobs • Expect similar

T E i U d tTexas Economic Update

Mine Yücel

Federal Reserve Bank of DallasFederal Reserve Bank of Dallas

Federal Reserve Bank of Dallas

Texas Economic UpdateTexas Economic Update

• Texas employment grew 2 1 percent in 2011Texas employment grew 2.1 percent in 2011– Added a total of 197,200 jobs

256 100 private jobs– 256,100 private jobs

• Expect similar job growth in 2012

• Faster growth possible if national and global economies pick up


Texas economy 1/12th of U.S.

G h 261 797 Mi2 7 4% f U S L d AGeography 261,797 Mi2 7.4% of U.S. Land Area

Population 25,145,561 8.1% of U.S. Population

Output $1,207.5 (Bil.) 8.3% of U.S. GDP

Employment 10,433,500 8.0% of U.S. Employment


Texas’ employment growth bests nation’sTexas employment growth bests nation s

4 U.S. Texas

Dec/Dec, SAAR

Nov/Dec Annualized

2.1 2.12

3

4

0.7

1.3

0.5

0

1

-2

-1 Dec/Dec

-2.6

-3.8-3.4

5

-4

-3


-52000 2002 2004 2006 2008 2010

The Texas Recovery: StrengthsThe Texas Recovery: Strengths

• Strong energy sectorStrong energy sector

• Rapidly growing exports

h i b bbl b ( i b• No housing bubble or bust (construction bust yes)

• Healthy banks

• State finances relatively healthy, although y y, gbudget cuts hurt


Government job losses huge drag in 2011j g g

3 7 3 6

6Q/Q, SAAR

Nov/SeptAnnualized

2.7 2.5

1.71.0

3.73.2

3.6

2.12

4

-0.9

0

-1.8

-4.0-4

-2

TX Nonfarm TX Private TX Government

7 2

-6


-7.2-82011 Q1 2011 Q2 2011 Q3 2011 Q4

2011 employment growth(NAICS Super Sectors, SA by FRB Dallas

58.9

80

( p , yYTD growth through Nov)

Thousands of jobs

44.3 43.2

58.9

35.8

25.331.340

60

9.3

3 0 -1 40

20

-3.0 -1.4

-40

-20

-58.9

80

-60

Oil & Gas Trade Prof &


-80 Oil & Gas Extraction and Mining Support

(2.2%)

Financial Activities (6.0%)

Trade, Transp & Utilities (19.9%)

Manufacturing (7.9%)

Educational & Health Services

(13.6%)

Construction (5.3%)

Leisure & Hospitality (10.0%)

Information (1.8%)

Prof. & Business Services (12.8%)

Government (16.8%)

Construction activity weakReal $ Mil

3500

4000

Real $, Mil6MMA, SA

3000

3500

Nonresidential

2000

2500

Residential

Nonresidential

1000

1500

Residential

0

500 Nonbuilding


02005 2006 2007 2008 2009 2010 2011

New home construction 120

Index, SA, 5MMAJan 2008=100

100

120

80

60

Single Family Permits

40Single Family Starts

20Multifamily Permits


02008 2009 2010 2011

House prices not yet stable(FHFA Purchase‐Only Index, Q2)

304-Q Percent Change

20

30

10

-10

0

CAU.S.TX

-20

40

-30


-402000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Mortgage delinquencies fallingPercent SA

5

6 Texas Deliquencies Texas Foreclosures StartedU.S. Delinquencies U.S. Foreclosures Started

Percent, SA

4

5

2.8

3.5

3

2

0.7

1.0

0

1


01998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Texas has much lower share of dunderwater mortgages

70

Percent of mortgages with balance > home value, 2011Q3

5860

4744

3540

50

30

22

20

30

10

0

10

Federal Reserve Bank of DallasSource: Core Logic

0Nevada Arizona Florida Michigan California Texas U.S.

Noncurrent loans by loan typeU S banksU.S. banks

6

Other

Percent of Loans

5 Other Consumer

Credit Card

Commercial & Industrial

4.2

3

4 Commercial & Industrial

Commercial RE

Residential RE

2

1


02005 2006 2007 2008 2009 2010 2011

Noncurrent loans by loan type11th District banks11 District banks

3 5

4

Other

Percent of Loans

3

3.5Other Consumer

Credit Card

Commercial & Industrial 2.5

2

2.5

Commercial & Industrial

Commercial RE

Residential RE

1

1.5

0.5

1


02005 2006 2007 2008 2009 2010 2011

Share of unprofitable banksShare of unprofitable banks

31

35Percent of Banks Reporting a Net Loss

31

25

30U.S. 11th District

22

20

25

15 1514

12

9810

1515

5

7


02000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Q1 '11 Q2 '11 Q3 '11

Slight easing of drought conditionsSlight easing of drought conditions

O t b 2010 O t b 2011 N b 2011October 2010 October 2011 November 2011


High oil prices and newh l i f l d illi

1601100Rig count, weekly

Nominal price,$ weekly

technologies fuel drilling

120

140

800

900

1000

TX Rig Count

80

100

600

700

40

60

300

400

500

l i

Oil Price (WTI)

0

20

40

0

100

200Natural Gas Price


002005 2006 2007 2008 2009 2010 2011

Note: Gas price is multiplied by 10

Texas exports softeningTexas exports softening

Index, SA, Real17% 16%Other

200

Texas

Index, SA, Real2000 Q1=100

7%12%

4%Mexico

Canada2011:Q2

160

180

35%

9%European Union

Asia, excl. China

120

140

100

120

U.S. minus TX


80 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

SummarySummary

• Texas employment grew 2 1 percent in 2011Texas employment grew 2.1 percent in 2011– Added a total of 197,200 jobs

256 100 private jobs– 256,100 private jobs

• Expect similar job growth in 2012

• Uncertainty and risk in the outlook


Q ti ?Questions?

Please go to www.dallasfed.orgfor data and regional

information.


Documents

Texas EiE conomic UdtU pdate · Texas Economic Update • Texas employment grew 2.1 percent in 2011 – Added a total of 197,200 jobs – 256256,100100 private jobs • Expect similar