Texas Economic Indicators

April 23, 2024

In March the Texas economy saw sluggish employment gains. Labor market tightness eased, and initial unemployment claims rose in mid-April. The March Texas Business Outlook Surveys (TBOS) indicated upward price pressures. Exports increased in February, and the Texas leading index was flat in March.

Labor market

Job gains decelerate in March

Texas employment expanded an annualized 1.6 percent in March. Job growth was an annualized 2.5 percent (42,316 jobs) in the first quarter, faster than the 2.0 percent (42,064) increase in fourth quarter 2023 (Chart 1). First-quarter job growth was generally broad based across sectors, though employment in trade, transportation and utilities and oil and gas declined. Education and health services, and construction employment growth slowed in the first quarter. Professional and business services, leisure and hospitality, and other services saw strong gains, accelerating to more than 4.5 percent. The Dallas Fed's Texas Employment Forecast was revised down to 2.3 percent job growth this year (December/December).

Unemployment claims tick up in Texas

Initial unemployment claims rose in Texas in mid-April after easing from March through early April (Chart 2). During the week ending April 13, initial claims in Texas ticked up to 14,645 while U.S. levels were little changed. In March, Texas unemployment was 3.9 percent, slightly above the nation's 3.8 percent. In Texas, the March unemployment rate was 3.4 percent for white workers, 3.9 percent for Hispanic workers and 6.9 percent for Black workers.

U.S. labor markets tighter than Texas'

In February, Texas had 1.3 vacancies per unemployed worker, a measure of labor tightness. This is slightly lower than the nation's 1.4 (Chart 3). For both the U.S. and Texas, the number of job openings per unemployed worker has been declining steadily since March 2022.

Texas Business Outlook Surveys

Texas Business Outlook Surveys price indexes were flat to higher in March (Chart 4). The manufacturing price index for raw materials rose to 21.1, while the prices received index rose from 0.8 to 11.0, suggesting a pickup in input costs and selling prices last month. The service sector input prices index fell from 34.3 to 30.4, while its selling price index remained at 7.7. Both service sector indexes were in line with their series average, indicative of moderate growth in prices. In the March TBOS survey, Texas business executives indicated they expect a 2.9 percent increase in selling prices and 3.6 percent increase in input costs on average over the next 12 months.

Exports

Texas exports expanded 4.9 percent in February, and the three-month moving average rose 2.4 percent, higher than the rest of the country's 4.4 and 2.2 percent increase, respectively (Chart 5). On a smoothed basis, exports to China (3.3 percent) and Latin America excluding Mexico (3.0 percent), and Mexico (0.9 percent) rose, while exports to Asia excluding China declined 1.6 percent.

Texas Leading Index

The Texas Leading Index, a composite of eight leading indicators that sheds light on the future of the state's economy, held steady in March after rising for three straight months (Chart 6). The three-month change was positive, however, despite most components contributing negatively including a decrease in average hours worked, the U.S. leading index, and well permits and an increase in the Texas value of the dollar and new unemployment claims.

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