Increases in energy and manufacturing activity led to a continued expansion in the Texas economy for May 2018, according to the Real Estate Center at Texas A&M University. Workers also are being drawn back into the workforce, due to low unemployment.
The Dallas Fed’s Business-Cycle Index rose 5.5 percent, to its highest level since 2014. Houston was up 6.2 percent due to growth in the energy industry, and Austin also was up 6.2 percent, due to a “booming technology industry.” The Texas Leading Economic Index, which measures future changes, was up 5.7 percent in growth year over year. This was a decrease in pace, however, and caused growth in the statewide employment forecast to decrease from 3.6 percent to 3.3 percent.
The 30-year-fixed-rate for home mortgages rose to 4.59 percent, while inventory for homes priced under $300,000 increased by half a percent. The Residential Construction Cycle (Coincident) Index reached its highest level since 2008 with high construction values and high industry employment, and the momentum is expected to continue through the summer. Texas housing sales continue to outperform national sales.
During May 2018, Texas added 34,700 nonfarm jobs. This marked 23 consecutive months of employment growth in Texas. The labor force participation rate reached a three-year high, at 63.9 percent, and unemployment stayed steady at 4.1 percent. Initial claims for unemployment insurance were at almost a decade-low of 58,928. Austin’s unemployment rate decreased to three percent, the lowest among the large cities. Revisions in data revealed Austin experienced a spring slowdown in job creation, but 4,300 new leisure and hospitality jobs in May reversed course.