Outlook for the Texas Economy | November 2024

Outlook for the Texas Economy summarizes significant state economic activity and trends. All measurements are calculated using seasonally adjusted data, and percentage changes are calculated month over month, unless stated otherwise.Click here to receive email notifications each time this report is published.

The Texas job market made minor gains, adding less than 1 percent to employment. Unemployment ticked up to 4.2 percent after settling at 4.1 percent since July. Furthermore, the consumer price index (CPI) increased for the second month in a row after making progress for most of the year. Despite these setbacks, both the Texas leading index and consumer confidence grew, signaling that the months ahead will be positive.

Inflation Progress Stalls Again

The CPI grew by 2.7 percent year over year (YOY) before seasonal adjustment. September had the lowest reading at 2.4 percent, but it has grown each month since. Core inflation, which excludes food and energy price volatility, has remained steady at 3.3 percent since September. 

With inflation moving in the wrong direction over the past couple of months, uncertainty in the markets has grown, increasing speculation of further rate cuts. 

Texas Payroll’s Minor Increase

Texas nonfarm employment grew by 9,100 jobs, a 0.6 percent month-over-month (MOM) increase. Three of the big four metros grew. Both Houston and San Antonio grew by approximately 0.2 percent MOM, while Austin grew by only 0.1 percent. DFW was essentially unchanged from October. 

In November, the trade, transportation, and utilities sector had a decline of 1,800 jobs, marking the first month of decline since March 2024. The professional and business services sector saw a modest reduction, losing 800 jobs. In contrast, the education and health services sector added 5,900 jobs, representing a 0.3 percent increase, highlighting growth in this area. 

Worker sentiment in Texas continued to improve as the labor force participation rate rose by 0.1 percentage point from October, reaching 64.7 percent. This marks a steady increase of 0.1 percentage point each month over the past four months since August. However, the unemployment rate edged up slightly by 0.1 percentage point to 4.2 percent in November. Concurrently, continued unemployment claims averaged approximately 157,961 per week, 7,478 more than in October. 

Texas Homes Sales Decrease

Total home sales in Texas declined by 2.2 percent in November, with 28,399 transactions recorded statewide. Among the state’s major metro areas, Houston experienced the largest drop, with sales decreasing by 10.7 percent to 7,153 transactions. Austin followed with a 3.9 percent decline, totaling 2,454 transactions. In contrast, San Antonio reported a 1.2 percent increase, reaching 3,003 transactions, while DFW posted modest growth of 0.7 percent, with 8,445 transactions. 

Positive Signs Ahead for the Service Sector

Texas private service sector job growth was flat in November, gaining fewer than 1,000 jobs or 0.4 percent MOM. There are some positive signs for the months ahead. According to the Texas Service Sector Outlook Survey, the revenue index increased to 10.9, indicating improved business conditions. Notably, the employment index rebounded significantly, rising to 5.1 from -0.2, suggesting a turnaround in hiring activity and increased demand for labor within the sector. This upward shift in both revenue and employment metrics reflects growing optimism among businesses and potential strengthening of economic momentum heading into the end of the year. 

The general business activity index climbed eight points to 9.8 in November, marking its highest level since early 2022 and signaling a notable improvement in overall economic sentiment. Similarly, the company outlook index rose by six points to 10.1, reaching its highest reading in more than two years, reflecting heightened optimism about future business conditions. Meanwhile, the outlook uncertainty index dropped significantly by 16 points to 1.8, its lowest level since mid-2021, indicating businesses are feeling more confident and less uncertain about the economic landscape. These positive shifts suggest Texas businesses are regaining confidence in both current and future conditions, potentially setting the stage for sustained growth in the months ahead.

Texas Oil and Gas Exports Improve

Texas’ total commodity exports rose by 3.6 percent MOM in October but declined by 6.8 percent YOY, reflecting mixed performance in the trade sector. Demand for the state’s leading exports, oil and natural gas, surged 6.7 percent MOM but fell 12.3 percent YOY, highlighting volatility in global energy markets.  

Meanwhile, petroleum and coal exports increased by 1.8 percent MOM but dropped 4.7 percent YOY. These trends suggest short-term gains in export activity, driven by rebounding energy demand, though YOY declines indicate lingering challenges in the global trade environment. 

Select Econo​mic Indicators

• In November, the Texas Leading Economic Index rose to 125.5, up from 125.1 in October, marking a 0.4 MOM increase. 
• Nominal average hourly earnings decreased to $33.39 in November, reflecting a 4.9 percent YOY increase. 
• Earnings increased across two of the four major metros, with Austin experiencing a $0.25 increase and San Antonio seeing an $0.53 increase. Meanwhile, DFW saw a decrease of $0.36, and Houston stayed at the same level as October. 
• Texas consumer confidence increased by 8.6 percent MOM in November, reaching 118.9. 
• The ten-year U.S. Treasury bond rose by 26 basis points, standing at 4.36 percent. 
• The Federal Home Loan Mortgage Corporation’s 30-year fixed-rate rose 38 basis points to 6.81 percent. 
• The West Texas Intermediate (WTI) crude oil spot price decreased by 2.8 percent MOM to $69.95. The Henry Hub natural gas spot price decreased by 3.6 percent MOM from $2.20 to $2.12 per million British thermal units (BTU).