HOUSTON UPDATE

http://www.uh.edu/irf/

August 24, 2010
Houston Economy Slows After Initial Rebound

There is now ample evidence that the Houston economy has slowed down significantly after a very strong rebound in the 4th quarter of last year. That quarter the Houston economy gained on a seasonally adjusted basis approximately 10,000 jobs, which had it continued would have produced over a 1.5% annual increase in local employment. Unfortunately, those gains came to an abrupt halt in January. In fact, July’s seasonally adjusted employment (the last reported by the Texas Workforce Commission) is approximately the same as January’s. This change in fortunes has nothing to do with the “big news stories” of this past spring – Continental’s merger, the BP spill, or potential bad news for the Johnson Space Center. Basically, it reflects the reality that most of us recognize, namely that the U.S. recovery is losing steam. Virtually all sectors of the local economy are losing momentum, though the starting month of the slowdown does seem to vary sector by sector. Right now is not a time to be comparing year-over-year employment numbers because July and August were at the bottom of an incredible slide in employment during the spring and early summer of 2009. Virtually all improvements in the year-over-year numbers came last fall and early winter. Right now Houston seems stuck in neutral.