Houston Economic Indicators

Houston’s labor market growth was strong and broad based in April. In the energy sector, production jobs declined year over year while growth has been concentrated in mining-related services. Exports of energy goods through the Port of Houston ticked down in March. Inflation slowed in April, and real wages were up year over year.

Employment

Houston added jobs at a strong pace in April. Annualized total nonfarm job growth from March to April was 4.3 percent (or 12,110 jobs).

Annualized employment growth was 2.0 percent (17,163) from January through April (Chart 1). The strongest gains were in education and health services (4.2 percent), leisure and hospitality (3.7 percent) and financial activities (3.6 percent). Education and health services added 4,700 jobs while leisure and hospitality added 3,273. Trade, transportation and utilities was the only sector to shed jobs during that same period, declining 0.7 percent (-1,217 jobs).

From April 2023 through April 2024, job gains were similarly strong. The entire labor market grew 1.9 percent, adding 64,425 jobs. Sectors with strongest growth were education and health services (4.0 percent), information and other services (3.7 percent), leisure and hospitality (2.8 percent) and government (2.8 percent). Oil and gas and mining support contracted 2.3 percent.

Energy

Rig count ticks down

The U.S. oil rig count declined from 625 in March 2024 to 617 in April. West Texas Intermediate crude oil prices rose from $81.28 per barrel to $85.35 per barrel over the same period (Chart 2). Mining-related jobs rose from 229,674 in March to 230,334 in April. Employment in oil and gas extraction as well as support activities for mining rose from 67,323 to 67,616.

Mining-related activities added 2,780 jobs from April 2023 to April 2024. This was largely due to strength in fabricated metal products and engineering services offsetting losses in support activities for mining, which shed 2,137 jobs year over year.

Historically, the rig count and mining jobs have closely followed the price of oil, but that relationship weakened after the pandemic. Increasing productivity and efficiency in the oilfield and a shift to business models that prioritize investor returns over production growth mean these publicly available indicators are now less responsive to changes in the price of oil.

Energy exports through the Port of Houston fall

The seasonally adjusted, real value of oil and gas exports through the Houston port district declined from $11.1 billion in February to $10.8 billion in March (Chart 3). Exports of petroleum and coal products fell from $4.5 billion to $3.7 billion. Similarly, exports of chemicals and plastics ticked down from $3.6 billion to $3.4 billion. However, while energy-related exports fell, exports of all other goods ticked up slightly from $3.46 billion to $3.53 billion.

Real exports of oil and gas are growing strongly longer term, while petroleum products, chemicals and other exports have been generally flat over the past 10 years. Year to date, the trio of oil and gas, chemicals and petroleum products comprised 83.9 percent of the value of real exports from the Houston–Galveston Customs District.

From March 2023 to March 2024, oil and gas exports declined 0.5 percent. This was due to a very strong month of exports in March 2023. Petroleum and coal products grew 3.2 percent over the year, while chemicals and plastics fell 2.6 percent. Exports of all other goods increased 3.6 percent.

Retail fuel prices edge down

The average retail price of regular gasoline in Houston declined to $3.09 per gallon the week of May 27 (Chart 4). This is after several weeks hovering around $3.15 per gallon. Diesel prices along the Gulf Coast fell to $3.48 per gallon after hitting a 2024 high of $3.87 per gallon the week of Feb. 12.

This comes as the price of Brent crude oil ticked down to $1.94 per gallon the week of May 13 from a recent high of $2.19 per gallon the week of April 8. Crude oil contributed 55 percent of the retail cost of a gallon of gasoline in April and half the cost of diesel.

Prices

Houston consumer price index (CPI) inflation slows

Inflation in Houston was 2.9 percent in April (Chart 5). This is down from March’s reading of 3.1 percent. The inflation rate in Houston has been ticking down since January after rising in the latter half of 2023. Meanwhile, the U.S. CPI was 3.4 percent in April, down slightly from 3.5 percent in March. U.S. CPI inflation has been moving sideways since June 2023.

Energy is one of the most volatile goods that consumers purchase. In April, energy prices in Houston rose 5.5 percent annually. U.S. consumers saw energy prices increase by 2.6 percent year over year in April.

Shelter inflation still high but slowing

After a setback toward reducing inflation in late 2023, food and shelter inflation in Houston is slowing again (Chart 6). Food prices in Houston rose 2.6 percent year over year in April—down from a high of 14.7 percent in August 2022. Shelter inflation in April was 4.5 percent. Typically, CPI housing data lag actual market rents by slightly over a year. April multifamily market rent growth was under 1.0 percent.

Houston core CPI inflation—which excludes the volatile food and energy categories—saw 2.6 percent annual growth in April. Core inflation has been trending down since the start of the year.

Houston wage pressures still present

Hourly wages in Houston ticked down to $34.79 in April from $34.85 in March, adjusted for inflation and seasonality. However, real wages in April were up 1.9 percent from one year prior (Chart 7). In April 2023, the real average hourly wage was $34.13.

The Employment Cost Index (ECI)—a better but less timely measure of wage growth than hourly earnings—has risen sharply in Houston since second quarter 2023. The annual percent change in the Houston ECI rose to 5.3 percent in first quarter 2024. This is up from a low of 2.6 percent in second quarter 2023. In contrast, U.S. ECI has been steadily declining since second quarter 2022.