Houston jobs growth accelerates but headwinds are ahead

The Federal Reserve Bank of Dallas recently published its monthly economic outlook for Houston. Highlights were

  • Houston jobs accelerated to an annualized rate of 5.5% over the three months ending in June (41,600 jobs). Biggest gains were in professional and business services (11,500), construction (6,800) and manufacturing (4,000). Last month’s figure was 4.8%. Construction jobs surged but the growth in manufacturing abated.
  • Year-over-year job growth increased to 2.9% in June (88,500). Last month the figure was 2.6%.
  • Houston unemployment rate dropped to 4.4% in June. The Texas rate also dropped slightly to 4.0%, while the overall rate in the USA rose to 4.0%.
  • Apartment vacancies declined sharply at the end of 2017 to 5.9%, as flooding forced many people out of their homes temporarily. In the first quarter the rate increased to 6.3%.
  • Vacancy rate for commercial office space is still increasing and now stands at 23.1%. Industrial vacancy rates remain low at 4.9%.

The Feds expect the expansion rate in Texas to slow in the second half of the year due to a tight labor market and a slowing in export growth. Additionally growth in Houston will moderate as Hurricane-Harvey induced activity dissipates in the second half of the year.

The Feds also report that ‘Numerous business contacts across a wide range of industries are expressing concern about the impact of the ongoing trade disputes on future growth and prices.’


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