TX job growth accelerates; Employment forecast surges to 2.7 percent for 2017
DALLAS, TX (KCBD) - The Texas economy continues to gain momentum, posting job gains across most sectors and all major metro areas, said Federal Reserve Bank of Dallas economist Emily Kerr in the latest Texas Economic Update video.
"Texas economic growth continues to accelerate," said Kerr. "We just got new job numbers in for January, and they show really strong growth, almost 5 percent month over month from December, and that represents the strongest gain since October 2014."
Employment surged 4.9 percent in January, with Dallas–Fort Worth and Austin posting the strongest gains and Houston the weakest. Incorporating this data as well as upward revisions to December jobs numbers and an increase in the Texas Leading Index, the Texas Employment Forecast now suggests that jobs will grow 2.7 percent in 2017. Based on the forecast, 331,600 jobs will be added in the state this year.
"This 2.7 percent for 2017, if realized, would be a full percentage point above what was seen last year and also well above the 2 percent long-run average for Texas job growth," said Kerr.
The Dallas Fed's Texas Business Outlook Surveys also point to strengthening activity in 2017. The Texas Service Sector Outlook Survey revenue index showed stronger expansion than what was seen in 2015 and 2016, Kerr said. Similarly, the Texas Manufacturing Outlook Survey production index pushed higher in February to near 2014 levels, when manufacturing boomed with high oil prices and a thriving state economy.
Even with these positive signs, potential challenges and risks remain, according to Kerr.
"A headwind for the Texas economy is certainly the appreciating dollar, which makes Texas exports more expensive and thus less competitive in the global marketplace," Kerr said. "In terms of downside risks, if oil prices were to lower, that would hurt the Texas economy, and if any new trade policies were to disrupt the trade relationship between Texas and Mexico, that would also be a potential risk for Texas."
