DALLAS, Jan. 22, 2024 /PRNewswire/ -- The Comerica Texas Economic Activity Index increased by 5.3% annualized in the three months through October and was up 2.2% from a year earlier. Five of the Index's nine components rose in the month, while four fell. The Texas labor market is cooling: Employment rose by a modest 18,600 in October and growth was notably slower compared to 2022 when 52,500 jobs, on average, were added per month. Also indicating a softer job market, continuing jobless claims rose again and were above 100,000 for the fourteenth consecutive month. And the unemployment rate held at 4.1% for the sixth consecutive month, three tenths of a percentage point above the national rate.
Housing starts slumped by 4.7% in October and were down 11.7% from a year earlier. Residential construction, down 12.6% through October versus the same period in 2022, is a drag on Texas' economy as soaring mortgage rates and high prices sideline many would-be homebuyers. Despite this, house prices rose in October for the seventh consecutive month. Strong growth of population and employment, and limited housing supply are supports for Texan house prices. Seasonally-adjusted industrial electricity sales surged by 3.8% and were up 7.9% from a year earlier. Seasonally-adjusted active oil drilling rigs fell sharply by 3.2% and were down by nearly 17% from a year earlier. Despite the reduction in active drilling rigs, oil production and employment are notably higher than in 2022. Hotel occupancy fell again and has been down in seven of the ten months through October. The strong dollar and the end of years of pandemic-related travel restrictions have American tourists traveling more internationally, diverting demand from in-state destinations. Tax receipts show real consumer spending fell by 3.3% in October and come on the heels of a slight contraction in the third quarter. Nonetheless, consumer spending was up by 1.4% through October compared to the same period last year.
Real GDP in the Texan economy was up a solid 5.7% in the first three quarters of last year from the same period in 2022, indicating strong momentum heading into the final quarter. While Texas likely outpaced the national economy again last year, high inflation, high interest rates, and a cooler housing market will be persistent headwinds to Texas and are likely to weigh on economic activity in 2024.
The Comerica Texas Economic Activity Index is a monthly composite indicator of state economic activity. The Index provides a wholistic advance view of the state of Texas's economy, using economic data that are available about one quarter earlier than real GDP is released. The index is comprised of nine components: Nonfarm payroll employment, continuing claims for unemployment insurance, housing starts, house prices, industrial electricity sales, the Texas rotary rig count, foreign trade, hotel occupancy, and sales tax revenue. All data are seasonally adjusted with nominal values converted to constant dollar values as appropriate. To filter out month-to-month volatility in the index components, the index is calculated from the three-month moving averages of its components. Values for a minority of components are projected from the prior months' release due to the timing of data releases.
Comerica Bank, a subsidiary of Comerica Incorporated (NYSE: CMA), is a financial services company headquartered in Dallas, Texas, and strategically aligned by three business segments: The Commercial Bank, The Retail Bank, and Wealth Management. Comerica focuses on building relationships and helping people and businesses be successful, providing more than 400 banking centers across the country with locations in Arizona, California, Florida, Michigan and Texas. Founded 175 years ago in Detroit, Michigan, Comerica continues to expand into new regions, including its Southeast Market, based in North Carolina, and Mountain West Market in Colorado. Comerica has offices in 17 states and services 14 of the 15 largest U.S. metropolitan areas, as well as Canada and Mexico. Comerica reported total assets of $85.8 billion at Dec. 31, 2023. Learn more about how Comerica is raising expectations of what a bank can be by visiting www.comerica.com, and follow us on Facebook, X (formerly known as Twitter), Instagram and LinkedIn.
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