Pandemic Containment is Vital as Infections Weigh on Consumer Behavior

Wage numbers accelerated in real terms despite rising inflation. Moreover, oil industry activity accelerated as oil prices increased and the global economic recovery continued. Meanwhile, retail sales surpassed a record-breaking $50 billion, but real commodity exports decelerated, according to research from the Real Estate Center at Texas A&M University.

In contrast, both an increase in the real price of West Texas Intermediate and a decrease in the real rate for the 10-year Treasury bill (which continues to exhibit a negative return in real terms) countered the decrease in the index.

Based on both the Texas Weekly Leading Index and U.S. employment numbers from December, which increased by 0.1 percent over November, the Texas economy recovered the 1.5 million jobs lost between March and April 2020, and now employment is expanding around the state.

Containment of the pandemic is vital as additional waves of infection, mainly from the Omicron variant, can weigh on consumer behavior and slow the return to pre-pandemic conditions. The outlook for the reopening and recovery of the state’s economy took somewhat of a hit as new cases reached a trough and are now increasing. Currently, more than 65 percent of the state’s population 12 years and older is fully vaccinated based on data from the Texas Department of State Health Services.

Future Texas economic growth could be hindered by possible upsurges in COVID cases as economic and social activity increases. Further waves of infections can reverse increased mobility and spending, affecting the path to recovery.