Houston records strong employment growth in June

The Federal Reserve Bank of Dallas has issued its June report for the Houston metropolitan area and the statistics were generally positive.

Federal Reserve Bank of Dallas – Houston economic indicators

The Houston Business-Cycle Index expanded at an average rate of 3.2% so far in 2017, in line with its historical average and substantially better than the 1.8% decline throughout most of 2016. (The Business cycle index is a composite of leading and lagging indices which is used to forecast changes in the direction of the overall economy).

The Houston metro area has added 33,175 new jobs in the first 6 months of 2017 (2.2% annualized growth). The unemployment rate in June was 5.1%, below the YTD average of 5.4% and slightly below the June 2016 figure of 5.3%. Total job ads surged in June, suggesting healthy employment growth through September. The Feds noted that total job ads have been negative for 31 of the past 32 months.

The inventory of homes for sales rose from 3.6 months of supply in January to 4.1 months in June, while the median price of homes sold has been flat since peaking in February. This suggests the housing market is experiencing a modest cooling.

Construction, both commercial and multi-family are declining since peaking in 2015 and 2016 respectively. This is causing job losses for construction workers, particularly as the petrochemical construction boom is beginning to wind down.

Office vacancy rates were 21.4% in the second quarter, the highest since 1993. The apartment vacancy rate bottomed out in Q1 and was 7.8% in Q2.

Texas employment grew at a 2.8% annualized rate in the second quarter, higher than the national rate of 1.6%.

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