The Texas economy, the world’s 11th-largest, continues to fare better that those of many other states. But Texas felt the effects of the worldwide recession during 2009. The state is emerging from the recession more quickly than the nation, but the pace of recovery is slow.
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 August 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 (-1.4 percent versus -2.4 percent.)
Despite the state’s economy contracting in 2009, Texas’ relative economic advantage has continued as the state and U.S. economies have begun to recover 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 from a reduced base by 3.0 percent during calendar 2010. During the first seven months of 2010, Texas nonfarm employment has increased by 181,500. This was 28 percent of the nation’s total nonfarm employment growth, signaling a Texas job growth rate that is more than three times the national average.
Jobs
Texas’ July 2010 unemployment rate was 8.2 percent, same as the previous month. The May U.S. rate was 9.7 percent, 0.3 percent higher than the previous month.
Total nonfarm employment in Texas increased by 4,600 jobs in July, the seventh consecutive month of net gains.
The U.S. lost 54,000 nonfarm jobs from July to August 2010. Between August 2009 and August 2010, the U.S. economy gained about 229,000 jobs. The U.S. unemployment rate increased in August to 9.6 percent.
The Texas unemployment rate has been at or below the national rate for 43 consecutive months.
Housing
Thus far, Texas has weathered the national real estate crunch without significant damage to property values. Sales and construction activity dropped to pre-2007 levels but have begun to shows signs of recovery in 2010.
A total of 6,027 building permits for single-family homes were issued in June 2010, 653 less than during June 2009. In the 12 months ending in June 2010, 69,655 permits were issued, 15 percent more than in the 12 months ending in June 2009.
The number of multi-family building permits issued rose from 1,399 in June 2009 to 1,941 in June 2010. During the 12 months ending in May 2010, 13,698 permits were issued, 58 percent less than in the 12 months ending in June 2009.
Sales of existing single-family homes decreased by 22.6 percent in July 2010 over the previous month, to a total of 16,729. July home sales were 25.4 percent lower than during July 2009.
In Texas, the median price for existing single-family homes increased by 0.7 percent from July 2009 to July 2010.
Texas experienced 11,727 foreclosure filings in July 2010. For most of calendar 2008 the number of Texas foreclosures declined, in contrast to the sharp increases in many other states that began in late 2006 and early 2007. Since Texas entered the recent recession in late 2008, the number of monthly foreclosures has been trending upward. But the recent jump in Texas foreclosures is in line with the levels experienced prior to 2008.
In July 2010, the Texas foreclosure rate was one in every 819 mortgages. This was substantially better than Nevada’s one in 82, Arizona’s one in 167, Florida’s one in 171, and California’s one in 200.
Consumer Confidence Index
U.S. consumer confidence increased by 4.9 percent from July to August 2010, but still remains weak, at a level of 53.5. Even so, nationwide consumer confidence has rebounded from its recent low in February 2009, and now stands 1.8 percent lower than one year ago.
The Texas region’s consumer confidence index rose from 66.0 in July to 66.6 in August 2010, and is now down 11.2 percent from its level a year ago
Oil and Natural Gas
In fiscal 2010, production tax collections for natural gas were down 49 percent over fiscal 2009. Tax collections for oil were up 14 percent.
By contrast, fiscal 2009 production tax collections for natural gas were down 48 percent over fiscal 2008. Tax collections for oil were down 39 percent.
Crude oil futures climbed to an all-time high closing price of $145.29 on July 3, 2008, then fell to a low point of $33.98 in February 2009. On September 2, 2010, crude oil futures closed at 75.02 per barrel, 10 percent higher than a year ago.
The natural gas futures price reached a high of $13.58 on July 3, 2008, then fell to a low of $2.51 on Sept 3, 2009.
Taxes
Texas sales tax receipts for July 2010 were 2.2 percent higher than for July 2009.
For fiscal 2009, state sales tax receipts were down 2.7 percent from fiscal 2008.
Motor vehicle sales tax collections for August 2010 were 20.5 percent higher than for August 2009.
The average core transaction price nationwide for a new car or truck during the first 15 days of August 2010 rose 19.8 percent to $26,994 from $22,533 in the first 15 days of August 2009.
For the first 15 days of August 2010, total national auto sales were 560,734 units, up 3.7 percent compared to first 15 days of August 2009.
Nationally, leases accounted for 25.9 percent of new vehicle sales in August 2010, an increase from 21.3 percent in August 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 efficienty programs in the propsoals could offset negative impacts. For the latest information visit our Cap and Trade Web page.
