Lackluster employment numbers signal economic slowdown for Texas, Dallas Fed says

Join The Temporary, our each day publication that retains readers on top of things on probably the most important Texas information.

A scarcity of employment progress and a slight improve in unemployment from July to August, together with fewer employers elevating wages, are indicators that Texas’ economic system is slowing, economists on the Federal Reserve Financial institution of Dallas mentioned in a report launched Thursday.

The report, written by Pia Orrenius, the Dallas Fed vice chairman and senior economist, and Analysis Analyst Ana Pranger, mentioned the variety of employed Texans held regular at round 13.5 million final month, whereas the state’s unemployment fee elevated from 4% in July to 4.1% in August.

In a video accompanying the report, Orrenius instructed the slowed financial exercise might assist gradual inflation in Texas.

“Whereas official statistics have but to indicate a significant easing of worth pressures in our area, our surveys counsel a quickly rising share of Texas firms are refraining from rising costs,” she mentioned within the video.

About 75% of Texas companies both saved costs the identical or lowered them from August to September, in keeping with the video.

In the meantime, a smaller share of employers gave their staff raises in August in comparison with July, the report mentioned. Solely 38% of producing companies and 29% of service firms boosted wages in August, the bottom month-to-month figures since spring 2021.

Regardless of the latest slowdown, the report mentioned Texas job progress is anticipated to exceed 4% this yr, which might exceed the state’s historic common progress fee of two%.

Whereas the August numbers might sign a coming recession, Orrenius mentioned in an interview Thursday that it’s “far too early to say.”

“We’re simply seeing this start, so we’re nonetheless unsure if it’s going to stay,” she mentioned. “I believe the September jobs numbers will inform us so much.”

She added the Federal Reserve’s latest string of rate of interest hikes aimed toward curbing inflation can be contributing to the Texas slowdown.

“They need the economic system to gradual as a result of we’d like much less inflation,” she mentioned. “Hopefully, it should lead to much less inflation, and the central financial institution can step off the brake.”