Feel better Louisiana: Texas' hot economy expected to cool

The bustling economy of neighboring Texas is likely to cool during the second half of the year as export growth slows and wage pressures rise, according to a report from the Federal Reserve Bank of Dallas.

As Houston Chronicle reports, the slowdown comes at a time when the Texas economy has been adding jobs at a 3.6% annualized rate during the first six months of the year, making it the nation’s No. 1 state for job growth. Last year, Texas was No. 9.

Unemployment in Texas, like Louisiana, dipped in June to 4%. Texas’ record low was 3.9% in November, which means that people who want to work are generally working.
Any slack in the labor market has been largely absorbed, according to the Federal Reserve Bank, which is putting pressure on companies to raise wages. The bank is receiving anecdotal reports of worker shortages across industries and skills.

“A historically tight labor market, uncertainty surrounding U.S. trade policy, including NAFTA, and an unexpected downturn in oil prices remain key downside risks to the outlook,” said Dallas Fed senior business economist Laila Assanie. The Houston economy is also expected to slow as Hurricane Harvey-induced business activity fades. Houston makes up 25% of the state’s jobs.

Despite predictions of slower growth ahead, the Federal Reserve Bank expects Texas to continue to grow faster than other states during the second half of the year.
Read the full story.