6/23/2020

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Texas Economic Performance and

Outlook Amidst COVID-19 Pandemic

Federal Reserve Bank of Dallas

6/26/2020

Keith R. Phillips

DISCLAIMER: The views expressed are the authors’ and do not necessarily reflect the views of the Federal Reserve Bank of Dallas or Federal Reserve System.

Texas in the Pandemic

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1

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6/23/2020

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Most states see some recovery in May – TX stronger than average

3

-2

-1

0

1

2

3

4

5

6

7

DC HI

ND

MN

WY

VA

NM

NE

CA

SD IA DE IL

MD

NY

OR

OK

NC

CT

AR

KS

KY

LA

U.S

.

GA

MO

MA

NH

TX

WV

AL

AK

FL

AZ

NJ

ME

OH

CO

UT

NV

MS

WA

WI

IN RI

TN

SC ID PA

MT

MI

VT

TexasU.S.

Percent change, May/April 2020, SA

SOURCES: Bureau of Labor Statistics.

Rebound broad-based across most sectors

4

1.9 1.5

-2.7

0.71.9

14.4

2.00.4

7.1

3.3

-5.3

2.71.2

-2.3

1.3

3.5

25.8

0.9 0.42.0

3.6

-5.1

-10

-5

0

5

10

15

20

25

30

Total Trade,Transp.& Util.

(20.0%)

Gov't(15.9%)

Prof. &Bus. Serv.

(14.4%)

Educ. &HealthServ.

(13.9%)

Leisure& Hosp.(9.0%)

Mfg.(7.3%)

Fin.Activ.(6.7%)

Constr.(6.2%)

Info. &Other Svcs

(4.9%)

Oil & Gas,Mining Sup.

(1.6%)

U.S. Texas

Job growth (percent)

NOTE: Data show May 2020/April 2020 non-annualized growth. Numbers in parenthesis indicate share of total state employment for May.SOURCES: Bureau of Labor Statistics; Texas Workforce Commission; FRB Dallas.

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Texas Job Losses in Pandemic Less than Nation – but revisions

may change this

5

-25

-20

-15

-10

-5

0

MI

VT

NV

NY HI

NJ

RI

MA

PA

DE

CT

NH

KY

ME

OH

WI

WA

CA

AK

U.S

.

MD IN LA

OR

NC

SC

WV

MT IL

MN FL

TN

CO

NM

MO IA

GA

TX ID VA

MS

AL

ND

KS

AZ

SD

AR

UT

WY

NE

OK

DC

Texas

U.S.

Percent change, Apr 2020/Feb 2020, SA

SOURCES: Bureau of Labor Statistics.

Texas job losses less severe than U.S. in most industries

6

-14.5-12.0

-4.3

-10.6 -11.3 -10.7

-49.1

-3.2

-13.9

-18.6

-9.8-10.1

-6.6

-1.5

-7.4-9.5

-4.9

-39.7

-1.6

-8.1

-14.4-11.8

-60

-50

-40

-30

-20

-10

0

Total Trade,Transp.& Util.

(20.3%)

Gov't(16.7%)

Prof. &Bus. Serv.

(14.6%)

Educ. &HealthServ.

(13.8%)

Mfg.(7.4%)

Leisure& Hosp.(7.3%)

Fin.Activ.(6.9%)

Constr.(6.3%)

Info. &Other Svcs

(4.9%)

Oil & Gas,Mining Sup.

(1.7%)

U.S. Texas

Job growth (percent)

NOTE: Data show April 2020/Feb. 2020 non-annualized growth. Numbers in parenthesis indicate share of total state employment for April.SOURCES: Bureau of Labor Statistics; Texas Workforce Commission; FRB Dallas.

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Texas unemployment rate spikes; slightly below nation’s

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13.3

13.0

0

2

4

6

8

10

12

14

16

'00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20

Percent, SA

NOTES: Data through May 2020. Grey bars show U.S. recessions.

SOURCES: Bureau of Labor Statistics; Texas Workforce Commission; adjustments by the Dallas Fed.

U.S.

Texas

8

Texas Business Outlook indexes show services,

manufacturing activity falling more slowly in May

-28.1

-28.0

12.4

9.2

-80

-60

-40

-20

0

20

40

60

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Revenue (TSSOS)

NOTES: Data through May 2020. Dashed lines are post-recession averages.

SOURCE: Federal Reserve Bank of Dallas Texas Business Outlook Surveys (TBOS).

Diffusion index, SA

Production (TMOS)

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TX Mobility & Engagement Continues to Rise, COVID-19 Grows

9

-50

-110

-100

-90

-80

-70

-60

-50

-40

-30

-20

-10

0

1

2

4

8

16

32

64

128

256

512

1024

2048

4096

3/1 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 5/31 6/7 6/14

COVID19 daily new cases

COVID19 daily deaths

Mobility and engagement

Num. of hourly employees working

NOTE: Mobility and engagement index data up to June 13, 2020, all other data up to June 19. Mobility and engagement index values are scaled such that the national index average over

January-Febuary are subtracted out and divided by the national value in the week ending in April 11, the lowest national weekly value. Mobility and engagement index value can be

interpreted as mobility and engagement relative to the national trough in mobility and engagement.

SOURCES: Homebase, Johns Hopkins University, SafeGraph, Federal Reserve Bank of Dallas.

Count, 7 day avg. Index, 7 day avg.

2923

29

-21

TX Mobility & Engagement and COVID-19

- 52 (4/10)

5/1: Phase 1

of re-opening

5/22: Phase

2 of re-

opening

-107 (4/10)

6/3: Phase 3

of re-opening

6/12:

Restaurants

expand to

75% capacity

Texas restaurant reservations weakening over past week

-100

-80

-60

-40

-20

0

20

Feb Mar Apr May June

Texas

Houston

San Antonio

Austin

Dallas

U.S.

NOTE: Data through June 18, 2020. Data refers to year/year percent change in seated diners at restaurants on the OpenTable network across all channels: online

reservations, phone reservations, and walk-ins.

SOURCE: OpenTable.

Percent change, y/y, 7 day moving average

-100

-90

-80

-70

-60

-50

5/16 5/18 5/20 5/22 5/24 5/26 5/28 5/30 6/1 6/3 6/5 6/7 6/9 6/11 6/13 6/15 6/17

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San Antonio

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San Antonio has fewer workers who can work from home

2837

4842

40

2350

3347

5727

5727

4234

3739

0 10 20 30 40 50 60 70

Other areas in TexasSan Antonio

AustinDallas/Fort Worth

Houston

HispanicAsianBlackWhite

Income>=$60,000Income<$60,000

With college degreeNo college degree

FemaleMale

TexasU.S.

Percent of Workers Compatible with Remote Working

Fractions of Workers Who Can Work Remotely

NOTE: All samples, except for the top bar are restricted to workers in Texas.

SOURCES: IPUMS, author's calculations. Federal Reserve Bank of Dallas

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San Antonio Likely to be More Impacted than State and Nation

• 12.8% of jobs in San Antonio MSA are in the leisure and hospitality sector

• 10.9% in Texas,11.0% in U.S.

• 54.8% in San Antonio MSA with high school or lower education

• 41.1% in Texas, 38.8% in U.S.

• While Initial claims have increased less in San Antonio, digital divide is greater here and thus more likely that

unemployed have had to call TWC to file a claim

• Of the 3.5 million calls the TWC received on Tuesday 4/7, 3.1 million calls were met with a busy signal

• Phone line backlogs continue

• Data so far suggests San Antonio not hit as hard – this is supported by mobility data - maybe because outbreak

and deaths not as bad here as in other places

• But revisions likely to be significant

San Antonio jobs decline less than other metros-data subject to revision

-8.2-8.9

-10.0

-8.0

-10.0

-15.0

-10.0

-5.0

0.0

DFW(29.4%)

Houston(24.3%)

Austin(8.5%)

San Antonio(8.4%)

El Paso(2.5%)

May/Feb 2020

NOTES: Data refer May 2020/Feb 2020 non-annualized growth. Numbers in parentheses refer to share of state employment in May 2020.SOURCES: Bureau of Labor Statistics; Texas Workforce Commission; seasonal and other adjustments by FRB Dallas.

Percent change, SA

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Job loss broad-based across industries – although tourism hit hardest

-8.0

-2.7

-2.4

-9.8

-6.4

-28.2

-1.8

-0.4

-3.2

-14.2

-6.2

-12.4

Total nonfarm employment

Trade, transp. & utilities (17.9%)

Government (16.9%)

Health & educ. services (15.4%)

Prof. & business svcs (13.4%)

Leisure & hospitality (10.2%)

Financial activities (9.2%)

Construction (5.8%)

Manufacturing (5.1%)

Other services (3.4%)

Information (1.9%)

Mining (0.9%)

February–May 2020

NOTE: Data show seasonally adjusted and annualized percentage employment growth by sector. Numbers in parentheses represent the share of total employment and may not sum

to 100 due to rounding.

SOURCE: Bureau of Labor Statistics; Texas Workforce Commission; adjustments by the Dallas Fed.

Percent Change, SA

T

Unemployment rate in San Antonio Below State and Nation

13.3

13.0

11.8

0

2

4

6

8

10

12

14

16

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

U.S.

Texas

San Antonio

Percent*

NOTE: Data up to May 2020.

SOURCE: Bureau of Labor Statistics.

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Total initial claims below state average

17.6

15.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

3/7 3/14 3/21 3/28 4/4 4/11 4/18 4/25 5/2 5/9 5/16 5/23 5/30 6/6

Texas Bexar County

NOTE: Weekly initial claims data are through the week ending June 6, 2020. Labor force data are as of March 2020.

SOURCE: Bureau of Labor Statistics.

Percent

COVID cases and hospitalizations on the rise – deaths likely to follow

0

1

2

3

4

5

6

7

8

9

10

0

50

100

150

200

250

300

350

400

4/8 4/15 4/22 4/29 5/6 5/13 5/20 5/27 6/3 6/10 6/17 6/24 7/1 7/8

Daily COVID19 Fatalities (7dma)Daily COVID19 Patients in Hospitals (7dma)

San Antonio Hospitalizations Rising Sharply - Deaths May Soon Follow(7dma)

San Antonio Trauma Service Area Daily Hospitalizations Bexar County Daily Fatalities (7dma)

Hospitalizations shifted forward 14 days

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Mobility declined less in San Antonio than state

-120

-100

-80

-60

-40

-20

0

20

1/4 1/18 2/1 2/15 2/29 3/14 3/28 4/11 4/25 5/9 5/23 6/6 6/20

San Antonio MSA

Texas

Index

NOTE: Mobility and engagement index data up to June 13, 2020.

SOURCE: Federal Reserve Bank of Dallas.

Outlook for 2020

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Texas and U.S. Leading Indexes plummet, recover slightly

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107.78

80.22

75

80

85

90

95

100

105

95

100

105

110

115

120

125

2014 2015 2016 2017 2018 2019 2020

NOTES: Data through May 2020. Oil-bust shading represents Texas energy-sector employment peak to trough, December 2014 to November 2016. Latest Texas value is

estimated.

SOURCE: Dallas Fed.

Index, 2014 = 100, SAOil bust

Texas

U.S.

Index, 2014 = 100, SA

Texas employment expected to rebound in second half but

end the year below 2019 levels

22

-70.8

37.9

52.3

-80.0

-60.0

-40.0

-20.0

0.0

20.0

40.0

60.0

Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20

Texas Payroll Employment Growth Estimate

NOTE: Forecast scenario estimates Texas payroll employment for May based on initial claims data and the remainder of the year based on US GDP growth of -34.4% Q2, +19.6% Q3, and +13.1% Q4, as well as direct COVID-19 impacts from March, April, and July and WTI prices following the futures contract curve as of 6/19.

Percent, SAAR

-3.2-10.0

-5.0

0.0

5.0Percent, Y/Y

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Texas unemployment rate expected to slowly decline

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13.513.0

8.9

2

4

6

8

10

12

14

16

Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20

Texas Unemployment Rate Estimate

NOTE: Forecast scenario estimates Texas payroll employment for May based on initial claims data and the remainder of the year based on US GDP growth of -34.4% Q2, +19.6% Q3, and +13.1% Q4, as well as direct COVID-19 impacts from March, April, and July and WTI prices following the futures contract curve as of 6/19. Unemployment rate forecast assumes a labor force participation rate of 63.8 and a payroll/household employment ratio of 0.96 at year-end.

Percent, SA

▪ Pandemic is unprecedented and has many aspects of a natural

disaster instead of a typical recession

▪ Economic activity is slowly recovering; path of the virus and consumer

and business responses highly uncertain

▪ Most economists expect a sharp decline in Q2 and recovery in the

second half – but still expect to end the year down significantly

▪ Texas likely to be close to national average despite prolonged

weakness in the energy sector

▪ Large tourism sector, smaller share of workers tha can work from

home suggested San Antonio would be hit harder – but lower infection

rate may have offset these negative factors – so far

Summary

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Thank you!Please visit dallasfed.org for more information

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Dallas Fed Publications

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Dallas Fed Economics

Texas Economic Indicators

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Southwest Economy

Special Reports

www.dallasfed.org

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