Last updateThu, 15 Nov 2018 4pm


Texas Economy Likely to Cool in Second Half

Texas has added jobs at a “blistering” pace through the first six months of 2018, but there may be a slight cooldown ahead, according to the Federal Reserve Bank of Dallas’ latest Texas Economic Update.

“After red-hot gains in the first of the year, the Texas economy will likely cool in the second half due to a historically tight labor market and a slowing in export growth,” said Dallas Fed Senior Business Economist Laila Assanie in a video accompanying the release. “Additionally, Houston’s growth—which makes up 25% of the state’s employment—will likely cool in the second half as Hurricane Harvey-induced activity dissipates. Despite the cooling, Texas will still see solid and above-trend job growth in the second half.” 

Global Trade Likely to Slow in Third Quarter

Trade expansion will likely slow further in the third quarter of 2018 according to the WTO’s latest World Trade Outlook Indicator (WTOI). The most recent WTOI reading of 100.3 is below the previous value of 101.8 and just above the baseline value of 100 for the index, signaling an easing of trade growth in the coming months in line with medium-term trends. This loss of momentum reflects weakness in component indices including export orders and automobile production and sales, which may be responding to the ratcheting up of trade tensions. 

U.S. Economy Appears Well-Positioned for Second Half

The U.S. economy entered its 10th year of economic expansion last month, and recent data point to continued economic growth for the second half of the year. According to Laton Russell of the Dallas Federal Reserve, robust consumer spending, above-trend labor force growth, and elevated business and consumer sentiment support above-potential growth through the rest of 2018. Inflation measures remain at or just below the Federal Reserve’s 2% target, and long-run inflation expectations are little changed. 

Conference Board: Employment Trends Increased in July

The Conference Board Employment Trends Index (ETI) increased in July, after increasing in June. The index now stands at 109.89, up from 108.72 (a downward revision) in June. The change represents a 5.4% gain in the ETI compared to a year ago.

“The growth in the Employment Trends Index remains strong, supported by positive contributions from all of its components,” said Gad Levanon, chief economist, North America, at The Conference Board. “We expect economic activity to remain strong in the coming months, and the rapid expansion of employment should continue despite the very tight labor market.”   

U.S. Construction Spending Fell in June

Construction spending in the U.S. during June 2018 was estimated at a seasonally adjusted annual rate of $1,317.2 billion, 1.1% below the revised May estimate of $1,332.2 billion. It’s the largest drop since April 2017.

The June figure is 6.1% above the June 2017 estimate of $1,241.3 billion. During the first six months of this year, construction spending amounted to $619.9 billion, 5.1% above the $589.6 billion for the same period in 2017. 

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