texas eie conomic udtu pdate · texas economic update • texas employment grew 2.1 percent in 2011...
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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
Federal Reserve Bank of Dallas
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
Federal Reserve Bank of Dallas
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
Federal Reserve Bank of Dallas
-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
Federal Reserve Bank of Dallas
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
Federal Reserve Bank of Dallas
-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 &
Federal Reserve Bank of Dallas
-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
Federal Reserve Bank of Dallas
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
Federal Reserve Bank of Dallas
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
Federal Reserve Bank of Dallas
-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
Federal Reserve Bank of Dallas
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
Federal Reserve Bank of Dallas
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
Federal Reserve Bank of Dallas
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
Federal Reserve Bank of Dallas
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
Federal Reserve Bank of Dallas
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
Federal Reserve Bank of Dallas
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
Federal Reserve Bank of Dallas
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
Federal Reserve Bank of Dallas
Q ti ?Questions?
Please go to www.dallasfed.orgfor data and regional
information.
Federal Reserve Bank of Dallas