Sign up for The Brief, our daily newsletter keeping readers up-to-date with the most important news from Texas.
A lack of job growth and a modest rise in unemployment from July through August, along with fewer employers raising wages, are signs the Texas economy is slowing, economists at the Federal Reserve Bank of Dallas said in a report released Thursday .
The report, authored by Pia Orrenius, the Dallas Fed’s vice president and chief economist, and research analyst Ana Pranger, says the number of employed Texans has remained steady at around 13.5 million over the past month while the The state’s unemployment rate rose to 4.1% in August from 4% in July.
In a video accompanying the report, Orrenius suggested that slowing economic activity could help slow inflation in Texas.
“While official stats are yet to show a significant easing in pricing pressures in our region, our surveys suggest that a rapidly growing proportion of Texas businesses are holding back on pricing,” she said in the video.
According to the video, about 75% of Texas companies either kept prices the same or cut them from August through September.
Meanwhile, a smaller percentage of employers gave their employees raises in August compared to July, the report said. Just 38% of manufacturing firms and 29% of service firms increased wages in August, the lowest monthly figures since spring 2021.
Despite the recent slowdown, the report said Texas job growth is expected to top 4% this year, which would exceed the state’s historical average growth rate of 2%.
While the August numbers could signal an impending recession, Orrenius said in an interview on Thursday that it’s “far too early to tell.”
“We’re just seeing the beginning, so we’re still not sure if it’s going to stay that way,” she said. “I think the September employment numbers will tell us a lot.”
She added that the Federal Reserve’s recent series of rate hikes aimed at curbing inflation are also contributing to the Texas slowdown.
“They want the economy to slow down because we need less inflation,” she said. “Hopefully this leads to less inflation and the central bank can step on the brakes.”
Comments are closed.