The Federal Reserve Bank of Dallas, in its quarter report on the state of the Texas economy, is sounding some alarm bells, News Radio 1200 WOAI reports.
The report stresses that the overall Texas economy remains strong, and stronger than the economies in most other states.
“The Texas economy is continuing to grow at a robust pace, although it’s moderating somewhat from what we saw earlier in the year,” said Dallas Fed Assistant Economist Christopher Slijk. “Job growth in the third quarter was 2.4 percent, which is down from the previous two quarters but still outpacing the national average.”
But Slijk cited two factors that may represent causes for concern moving forward.One is rising costs, especially rising labor costs, which are being driven by the state's record low 3.8% unemployment rate, which is making it harder and harder for employers to find the workers needed to grow their busiensses.
Secondly, the report cites a cooling of the housing market.“We’ve seen some cooling off in Texas housing markets over the past few months,” Slijk said. “Across the major state metros, home sales have been flat or down compared to recent highs. Across price brackets, we’ve seen the most slowing in homes sold between $250,000 and $749,000, which have been the major drivers of growth over the last few years.”
He cited rising mortgage rates, which are a function of the same rising interest rates which are intended to cool inflationary pressures. He says both supply an demand issues may be contributing to the slowing growth in the housing sector.