Poor jobs numbers signal economic slowdown for Texas, Dallas Fed says

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A lack of job growth and an uptick in unemployment from July through August, along with fewer employers raising wages, are signs the Texas economy is slowing, Federal Reserve Bank economists said. Dallas in a report released Thursday.

The reportwritten by Pia Orrenius, vice president and chief economist of the Dallas Fed, and research analyst Ana Pranger, said the number of Texans employed remained stable at around 13.5 million last month, while the rate of State unemployment had risen from 4% in July to 4.1% in August.

In a video accompanying the reportOrrenius suggested that slowing economic activity could help slow inflation in Texas.

“While official statistics have yet to show any significant easing of pricing pressures in our region, our surveys suggest that a rapidly growing share of Texas businesses are holding back from raising prices,” a- she said in the video.

According to the video, about 75% of Texas businesses held prices the same or lowered them from August to September.

Meanwhile, a lower percentage of employers gave raises to their employees in August compared to July, according to the report. Only 38% of manufacturing companies and 29% of service companies raised wages in August, the lowest monthly figures since spring 2021.

Despite the recent slowdown, the report says job growth in Texas is expected to exceed 4% this year, which would exceed the state’s historical average growth rate of 2%.

While August’s numbers could signal a coming recession, Orrenius said in an interview on Thursday that it was “far too early to tell.”

“We’re just getting started, so we still don’t know if it’s going to last,” she said. “I think the September jobs numbers will tell us a lot.”

She added that the recent series of interest rate hikes by the Federal Reserve aimed at curbing inflation were also contributing to the slowdown in Texas.

“They want the economy to slow down because we need less inflation,” she said. “Let’s hope that translates into lower inflation and the central bank can ease the brakes.”

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