During the previous oil price decline, states with “oil economies” suffered from energy economic shocks. Analysts with the Federal Reserve Bank of Dallas went one step further to develop models that measure employment fluctuations not just in states, but down to the Texas cities level.

The Fed noted that:

• Global and national shocks are estimated to account for 32% of employment fluctuations among Texas metros

• The remaining 68% of fluctuations is caused by business cycles specific to the metropolitan areas

• More than 40% of employment variations in Midland and Odessa could be attributed to energy-sector employment changes

• Fluctuations in energy employment didn’t play much of a role in areas with little or no oil-related activity, such as Dallas-Fort Worth and Brownsville

“Larger metro areas are generally more sensitive to developments in overall U.S. and international economics, while areas with a lot of oil and gas activity are impacted more by shocks specific to the energy sector,” Fed analysts noted.

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