The Federal Reserve Bank of Dallas has closed the books on the Fourth Quarter of 2017, and concludes that the Texas economy is growing so robustly that 'weakness is hard to find,' News Radio 1200 WOAI reports.
Employment increased by a very strong 3.7% in Texas between October and December, according to economist Emily Kerr, with 'gains that were broad based among industries and major metro areas.'
"We ended the year with job growth which was robust, so we are heading into 2018 with quite a lot of momentum," she said.
She says the Hurricane Harvey recovery created jobs in fields ranging from construction to retail, but that growth had begun to taper off near the end of 2017. But she says at the same time, the price of oil was rising above $60 a barrel, which led to job increases in oil and gas, manufacturing, and related industries.
Kerr says the biggest challenge facing the Texas economy in the first half of 2018 is its ability to continue to grow when the state is essentially running at full employment.
The Texas unemployment rate today is lower than it has been at any time since the 1970s, an era when far fewer women were in the work force at all, and far fewer minorities were in professional positions in the work force.
"We have this momentum in Texas, this stronger job growth, the economy is expending, but that could be restrained to some extend because firms are beginning to have difficulty filling positions," she said.
Kerr says more and more, employers in Texas are finding the need to raise employee wages to keep or attract workers, and that is leading to the possibility of inflation. In fact, this is the driver of the wild swings on Wall Street over the past several days, as investors ponder whether bonds will be a better bet than stock, if interest rates rise sharply to counter the inflationary pressure of full employment.
Kerr says another potential problem for the Texas economy is the ongoing NAFTA negotiations. She says the 1992 North American Free Trade Act has been a major boost for everything from agriculture to manufacturing to oil and gas, and some employers are starting to get nervous that it has yet to be settled
."A lot of Texas maufacturing, trade, and even service firms which support those industries, are understandably nervous about what could happen if those trade negotaitons fall apart," she said.