There’s No Such Thing as a Texas Recession
When it comes to sharing what people are talking about, I love bringing you good news. Not fairytales or folklore, rather real stories about life getting better in Central Texas.
The words of a leading economists are simple: despite the turndown in the petrochemical industry, despite the largest city in the state losing 5,000 jobs in the first quarter alone, Texas can absorb it. The boom continues.
No less an authority than Keith Phillips, the chief economist at the Federal Reserve Bank in Dallas said despite the impact of the oil price slump, the Texas economy is not headed for recession. In fact, Phillips assured Texans based on current data, the probability that Texas will go into recession this year is around 15 percent or lower.
If you look at the Texas Business Cycle Index over the last year, despite the big decline in energy prices and the decline in the oil and gas industry, the Business Cycle Index continues to grow, suggesting that Texas remains in expansion and has not gone into recession.
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The expansion has weakened, to be sure, Phillips said, pointing to the slowdown in job growth from 3.7 percent in 2014 to a mere 1.3 percent last year. Forward-looking measures of the economy such as the Dallas Fed’s Texas Leading Index point to continued slow growth ahead, but not recession, he said.
In addition, the Bank’s newest Texas Employment Forecast released on May 20 was revised upward to 1.5 percent, suggesting that 179,000 jobs will be added in the state in 2016.
“Jobs have to decline in order for there to be a recession, and the forecast suggests that jobs will continue to grow and thus we will not be in a recession,” Phillips said. “There’s still a possibility that things will weaken. There are also elements of data revisions that can affect what we know about the economy, so there’s still some uncertainty there, but I think our best forecast is that Texas will continue to grow this year.”
Thank you, Lord, for your blessings on Texas. May we be worthy and grateful!