A new report by the Federal Reserve Bank of Dallas shows it takes more than a major hurricane to slow down the locomotive that is the Texas economy, News Radio 1200 WOAI reports.
"The Dallas Fed's Texas Business Outlook surveys remained strong in September and October, suggesting that the impact from Hurricane Harvey was both temporary, and was not large enough to offset continued business growth," Dallas Fed economist Amy Jordan told News Radio 1200 WOAI.
She says despite the hurricane, which caused major damage to the state's largest metropolitan area, job growth in Texas this year will be a healthy 2.2%, nearly double the job growth seen in the state in 2016.
Jordan says several sectors remain strong, including retail, manufacturing, and business services.Ironically, when it comes to retail, the hurricane actually helped the economy.
"Driving strength in retail has been auto sales, which were particularly robust along the Texas Gulf Coast," Jordan said. "Customers headed to auto dealerships to replace vehicles which had been damaged by Hurricane Harvey."
Likewise, as the insurance checks roll in, homeowners who suffered losses in the hurricane are patronizing home improvement and furniture stores.
Jordan says what is noteworthy is the speed at which the Texas economy recovered from Harvey. There was a slight dip in economic activity in September, but that was more than offset by strong growth in October.
The biggest headwind facing the Texas economy is a problem that a lot of states would like to have. With the Texas unemployment rate at its lowest level in 17 years, there are simply not enough workers available to fill all of the new jobs that are being created.
"Labor markets have grown significantly tighter this year," she said. "The September Texas unemployment rate in October had fallen one percent just since April, and is now at a level not seen since December of 2000."
Another challenge facing the Texas economy, Jordan said, is the uncertainty surrounding NAFTA. Mexico is by far the state's largest trading partner, and Texas experts are so numerous that, were Texas an independent nation, the state would be the 20th largest exporter in the world. She says anything that upsets the balance of those exports with Mexico, from oil to automobiles, could cause a tremor across the Texas economy.