February 2016 H OUSING N EWS R EPORT While some are already predicting that the sun is setting on the Texas miracle, recent history suggests otherwise. Global oil prices spiked in the summer of 2008 to an all-time high of $133 a barrel, then plunged to $41 a barrel when the economy crashed and went into recession. That price drop was even more dramatic than the oil bust of 2014. And 30 years ago, oil prices went into a free fall, declining from over $30 a barrel in 1985 to nearly $10 by July 2006.
The Dallas Fed said the decline in oil and gas prices, the tight labor markets and weakening exports, would dampen Texas’ economy. “Low oil prices and the strong dollar have put a dent in Texas’ job growth,” said Mine K. Yücel, senior vice president and director of research at the Federal Reserve Bank of Dallas. “In 2014, Texas grew 3.6 percent, and added nearly 400,011 jobs. In 2015, the state grew 1.4 percent through October and added 136,500 jobs. We don’t expect growth to accelerate in 2016. “Low oil prices are also having a major effect on oil field activity,” said Yücel. “The Texas rig count started declining in November of 2014 — and has fallen more than 60 percent. Texas oil production started to decline in March. Production is down 200,000 barrels a day. Oil prices are expected to remain low, given weak demand and a supply glut. Low oil prices will continue to impact Texas job growth negatively in the coming year. Overall, the state as a whole should have weak but positive job growth through 2016.”
Mark G. Dotzour Economist College Station, Texas
Texas Economy Weaker, But Still Growing
Mark G. Dotzour, a former chief economist at the Real Estate Center at Texas A&M University at College Station, Texas, said the Texas economy is slowing down, but it is still growing. He said the growth is uneven in the state’s four major metropolitan areas, namely Austin, Dallas, Houston and San Antonio. “In October 2014, Houston was hit like a thunderstorm when OPEC decided to declare war on the U.S. oil industry,” said Dotzour, Continued Next Page
“ In October 2014, Houston was hit like a thunderstorm when OPEC decided to declare war on the U.S. oil industry. ”
SOURCE: U.S. Census Bureau
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