Consumers in Texas Hit by “Negative Ripple Effects”…”This is no longer a blip, but a new reality.”
by Wolf Richter
WolfStreet.com
March 8, 2016
It is by now an indisputable fact, driven home by just about everyone, including the Dallas Fed, that the Texas economy is big, diversified, and “highly resilient,” and that the collapse of the oil boom, while it may cause some “negative ripple effects,” won’t dent the overall economy.
Dallas Fed President Robert Kaplan himself had pointed that out. The energy sector accounted for only 2% of the state’s employment – albeit well-paid employment including many specialized engineers – and 10% of the state’s GDP, “a good deal lower than in the 1980s, when that oil bust pushed the Texas economy into a major recession,” he said.
So, well, yes, job growth came to a crawl as the manufacturing and energy sectors shed jobs; the unemployment rate rose from 4.4% at the beginning of 2015 to 4.6% at the end of 2015. Kaplan sees “a further rise” of the unemployment rate in 2016, with risks to his forecast being “to the downside if oil stays at or below $30 per barrel for an extended period.”
The Rest…HERE
