Houston Update - November 7, 2009

IRF’s New Houston Forecast Released At Symposium

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Understanding Regional Employment Statistics

Sometimes it can be terribly confusing understanding our local employment numbers and interpreting their implications for the Houston economy. Part of the problem is that novices and the media want to treat regional employment numbers like they do the national numbers, a habit that is reinforced by the way the Texas Workforce themselves report the data. The fact is that these numbers are neither the same, nor do they carry the same meaning. Full Story>>

Dr. Smith's commentaries from November 20, 2004 through the present are now available in Adobe Acrobat format. Click here to download the file.

• Economic Indicators
• Employment
• Price Data
• Excerpts from Fall 2008 Economic Forecast Symposium
• Selected Local Economic Indicators from DATABook Houston
• The Length and Extent of Recessions

• Trade deficit widens more than expected in Sept. 11/13/2009
• China's 3Q growth accelerates to 8.9 percent pace 10/19/2009
• Ireland's prices fall 6.5 percent worst since 1931 10/08/2009
• US imposes big tarriffs on Chinese tires, Beijing 09/14/2009
• Euro jobless rate climbs to 9.5 pct 09/01/2009
• Germany sees business mood brighten 08/26/2009
• Recession easing among wealthier nations 08/26/2009

• Mortgage delinquencies hit another record in 3Q 11/17/2009
• These 10 states may be closest to financial collapse 11/11/2009
• What Fed's Latest Move Means for Mortgages 10/05/2009
• Productivity gains may be bad news for job seekers 10/05/2009
• First-time jobless claims drop less than expected 10/29/2009
• Housing prices improve in August, Case-Shiller says 10/27/2009
• No relief in sight for Main Street banks 10/26/2009
• Capmark Financial files for bankruptcy protection 10/25/2009
• U.S. Initial Jobless Claims Rose More Than Forecast 10/22/2009
• Leading indicators signal growth, but jobs scarce 10/16/2009
• Foreclosures jump to record high 10/15/2009
• New Jobless Claims Hit 514,000 10/15/2009
• Foreclosures rise 5 percent from summer to fall 10/15/2009
• New jobless claims fall to 521K, lowest since January 10/08/2009
• Unemployment at 9.8%, 263,000 Jobs Lost 10/02/2009
• New US jobless claims rise more than expected 10/01/2009
• FDIC insurance plan is no long-term solution 09/29/2009
• New Data Shows More Home Price Gains 09/29/2009
• Low expectations for new loan help program 09/19/2009
• 42 states lose jobs in August, up from 29 in July; biggest cuts in Texas, Mich., Ga., Ohio 09/18/2009
• US Net Worth Grows $2 Trillion in 2Q 09/17/2009
• Regulators seize construction lender Corus Bank 09/14/2009
• Federal Deficit Hits $1.38 Trillion 09/11/2009
• July wholesale figures point to economic growth 09/11/2009
• New jobless claims fall more than expected to 550,000, as layoffs ease in improving economy 09/10/2009
• Foreclosure filings drop slightly from July to August, but still up 18 percent from last year 09/10/2009
• Jobless rate at 9.7% ; 216K jobs lost in August 09/04/2009
• July pending home sales rise to 2-year high 09/01/2009
• July new US home sales up 9.6 percent 08/26/2009
• Flat incomes raise doubts about economic recovery 08/26/2009
• New home sales, durable goods orders seen higher 08/25/2009
• Home Prices Surge Nearly 3 Percent 08/25/2009
• U.S. jobless claims rise, regional manufacturing rebounds 08/20/2009
• Housing Starts, Producer Prices Both Post Drops in July 08/18/2009
• Retail sales fall, new jobless claims rise 08/13/2009
• Job losses slow to 247,000; jobless rate dips 08/07/2009
• Jobless Claims Fall More Than Expected 08/06/2009

Houston Area:

• Oil slips below $81, retreating from 2009 high 10/15/2009
• National Association of Purchasing Management Press Release 10/12/2009
• Fluor Corporation Eliminates 500 Jobs 10/08/2009
• Natural gas prices jump 13 percent 09/14/2009
• Natural Gas Falls; Heating Bills Follow? 09/03/2009
• Crude prices rise as the dollar weakens 08/29/2009
• Natural-gas futures tumble 5.6% to end at seven-year low 08/27/2009

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Monthly Recap:

Monthly recap for September and October, 2009

There were many encouraging signs about the economy, but if there was one main theme it is that the employment picture both here and abroad remains rather dismal. Initial claims for unemployment remain in the U.S. above 500,000 per week, and even though current levels have declined by more than 100,000, they still remain higher than at any time during the previous two recessions. On the positive side, the housing market seems to have stabilized and consumer spending has held up relatively well. Both have to show resilience to the eventual removal of special stimuli, such as the “cash for clunkers” and “first time home buyer” programs, before we will know that the stabilization is real, however.

There have been several pieces of good news for Houston. Energy prices have reached year-to-date highs and at least for oil at a profitable level again. Also, the rise in the Purchasing Managers Index to 50 suggests that the worst of the recession is behind Houston. Nonetheless, similar to the nation, Houston continues to lose jobs, though at least the losses are about a third of what they were this spring.

As will be discussed at this fall’s symposium, the recovery has yet to start. Labor markets locally, nationally, and internationally must at least stabilize before we get too euphoric over the beginnings of a recovery.

News Flash 9/11/209

Houston’s Purchasing Manager’s Index Rises for the Fourth Consecutive Month

The Houston Purchasing Managers Index, produced by the National Association of Purchasing Management - Houston, rose in August for the fourth consecutive month to 46.8. Like its national counterpart, levels of the HPMI over 50 indicate production gains over the near term; readings below 50, show near term contraction. While the current level indicates further contraction in the regional economy, it also suggests a major slowing in that process compared to this spring when the HMPI hit a record low of 39. It is also positive that the upward trend is now 4 months old, suggesting that any one month’s figure was not just an aberration.

This news follows the release earlier this month from the national organization which reported an index of 52.9 for the country as a whole, the highest level since June 2007 and the first level above 50 in 18 months. Part of the current stimulus is related to the extreme low level of inventories among most U.S. manufacturers. Thus, any small increases in demand require increased production. Still, more data is needed to confirm these trends at both the national and regional level. For the U.S. we’ll want to see the index remain above 50 for a substantial period of time and for Houston it will be crucial that the index rise above 50 before year’s end.

> Read Prior News Flashes.