Blame the Labor Market: Texas Economic Cool-Down Likely

Texas job growth stood at 3.6% (annualized) during the first half of 2018. But according to the Federal Reserve Bank of Dallas, that percentage won’t stand in the second half of the year. Dallas Fed economists Laila Assanie and Stephanie Gullo are forecasting a slower second half, due to a tighter labor market and slowing export growth, meaning job growth in 2018 is forecast to be 3%.

Having said that, “slow” is relative. Analysts believe that payroll expansion is anticipated to remain above its long-term average. Basically, Texas employment has been expanding at two times the national rate in 2018, so far. In the goods sector, Texas employment is increasing 4.3% faster than the U.S. average. The issue, however, is “reports of worker shortages are rife across industries and skill sets,” the economists point out. This, in turn, is leading to increased wage pressures, higher costs and boosted price inflation.

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