Dallas Fed: Texas Economy Continues Strengthening, But . . .

Employment continued expanding throughout the Lone Star State in May 2017, while the manufacturing and services sectors also did well. However, according to the Federal Reserve Bank of Dallas, potential economic risks could be declining oil prices, a continued strong dollar and uncertainty regarding U.S. trade and tax policies.

On the employment side, Texas employment grew an annualized 2.5%, outpacing the nation’s 1.3% increase. Houston employment experienced its fifth consecutive month of job gains, registering the fastest year-to-date growth among the major metropolitan areas.

On the housing side, home prices continued appreciating, as residential construction and permitting fell. Home price appreciation is expected to continue.

In addition to concerns over oil prices and trade policies, auto delinquencies, fueled by subprime loans, rose. Combined with increasing interest rates, analysts forecast that both auto and credit card delinquencies will continue to increase.

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