Texas Economic Indicators

In April, the Texas economy posted strong job gains. Job openings show a downward trend in early May but remained above the nation. The Texas Business Outlook Surveys (TBOS) indicated wages and benefits rose for manufacturing and the service sector in May. Inflation continued to moderate in March, and house prices were flat. Retail tax collections dipped in April.

Labor market

Employment gains accelerate in April

Texas employment expanded an annualized 4.0 percent in April (45,700 jobs) after growing a downwardly revised 1.5 percent in March, while U.S. payrolls increased an annualized 1.3 percent (Chart 1). Through April, job gains have been relatively broad based, with the exception of the oil and gas and trade, transportation and utilities sectors. Job growth in other services, leisure and hospitality, and education and health services exceeded 4.0 percent. The Dallas Fed’s Texas Employment Forecast in May was revised up to 2.6 percent growth this year (December/December).

Job openings falling

Job openings largely continued trending down in Texas in early May but continued to outpace U.S. openings (Chart 2). Texas’ job openings were down 11.9 percent year over year on May 10, but were 20.8 percent higher than February 2020 levels. Meanwhile, U.S. job openings fell 13.3 percent but were 14.5 percent higher than February 2020 levels.

Texas Business Outlook Surveys

The Texas Business Outlook Surveys indicated continued growth in wages in May (Chart 3). The manufacturing survey’s (Texas Manufacturing Outlook Survey) wages and benefits index was at an average level after spiking in April, coming in at 21.0. The service sector index (Texas Service Sector Outlook Survey) rose from 14.2 to 16.1 and was in line with its series average. Both indexes suggested a continued moderate pace of wage growth.

Prices

In March, inflation continued to trend down, as the 12-month change in the Texas headline Consumer Price Index (CPI) ticked down to 4.1 percent (Chart 4). Moreover, the three-month annualized change, a more current measure of inflation, declined at a faster pace and was at 2.0 percent.

Housing

Home prices held steady in March. The Texas median selling price was little changed at $341,400 and has been relatively stable over the past two years (Chart 5). Among the major metros, Austin continued to have the priciest housing market with a median sales price of $446,200 and San Antonio the least expensive with a median sales price of $315,600—below the state average.

Retail sales

In April, the three-month moving average of real Texas retail sales tax collections was flat (Chart 6). However, state sales tax collections dipped in April to $5.0 billion and were down 2.6 percent from year-ago levels. Retail sales tax revenues were down in most of the state’s major metros last month, while their three-month averages rose.