Regional Economy Growing Steadily Despite Headwinds via Dallas Fed

he Texas economy has expanded at a moderate pace over the past six weeks. Employment growth was significantly slower in August than July. The real estate and energy sectors remain at high levels and continue to be the primary drivers of economic growth. However, the recently concluded government shutdown and continued fiscal uncertainty may be a drag on growth in the fourth quarter.

Employment Growth Around Long-Term Average

Job growth decelerated sharply in August, to a 0.3 percent annual rate, down from 3.6 percent in July. While monthly employment numbers have been volatile, anecdotal reports indicate a modest pickup in hiring in September. Employment grew in the first half of the year at a 2.4 percent annualized rate before declining slightly in the first two months of the third quarter to 2.1 percent (Chart 1). First-half growth was above Texas’ long-term average but slower than in 2012.

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