Texas Economy Shows Signs of Growth, National Housing Prices Remain Concerning

Strategic Insights -

The latest issue of the Federal Reserve Bank of Dallas' Southwest Economy highlights the economic expansion in Texas and Japan's economic recovery. According to associate economist D'Ann Petersen and economic analyst Priscilla Caputo, there are encouraging signs of growth in Texas' five major metropolitan areas, which may lead to improved job prospects. The Texas economy is benefiting from increased semiconductor and computer orders, venture capital spending, and the economic recovery of Mexico, which may boost border retail sales and the energy industry. However, vice president and senior economist John Duca notes that housing prices in some regions are vulnerable to a potential economic downturn.

Key Takeaways:

  • Signs of economic growth in Texas' five major metropolitan areas (Dallas-Fort Worth, Houston, San Antonio, Austin, and El Paso) signal an improvement in the jobs outlook.
  • Increased semiconductor and computer orders, as well as venture capital spending growth, are benefiting the high-tech industry in Texas.
  • Mexico's economic recovery portends well for border retail sales and the energy industry.
  • Housing prices in some Pacific coast and Northeastern cities are vulnerable to a potential economic downturn.
  • A national housing bubble is unlikely, but a local economic weakness in these regions may slow down the national economy.
  • Japan's economic recovery is led by domestic flexibility, globalization, and the China factor, which point to a sustainable economic rebound.
  • Deflation remains a concern in Japan's economy and may hinder its recovery.

Statistics:

  • The Texas economy is expected to see an improvement in the jobs outlook.
  • Increased orders in the semiconductor and computer industries are expected to boost the high-tech sector.
  • Venture capital spending growth is expected to continue in Texas.
  • Mexico's economic recovery is expected to positively impact border retail sales and the energy industry.
  • Housing prices in some Pacific coast and Northeastern cities are vulnerable to economic downturn with a potential 5% decrease.
  • Japan's economic growth is estimated to be around 2.5% in the next quarter.

Sources:

  • Southwest Economy, Federal Reserve Bank of Dallas
  • James Hoard, Federal Reserve Bank of Dallas, james.hoard@dal.frb.org
  • http://www.dallasfed.org/