Job losses in the energy sector of the Texas economy slowed during the third quarter. Houston saw a turnaround in employment trends, but gains were more robust in Dallas and Fort Worth. Meanwhile, exports of Texas natural gas to Mexico continue to increase.
"The pace of Texas job growth more than tripled in the third quarter, reaching an annualized 2.6% and outpacing the nation by a percentage point," the Federal Reserve Bank of Dallas said in a note on the regional economy issued earlier this month. "Third quarter growth was a substantial improvement over first and second quarter growth of 0.9% and 0.8%, respectively.
"Houston saw a stark turnaround; employment expanded 1.9% in the third quarter after contracting an annualized 1% through June."
Dallas saw the largest employment gains during the third quarter at 5% on an annualized basis; Fort Worth saw a 4.3% increase, the Dallas Fed said in a note titled "Could this be the end of the Texas slump?"
Broadly, the Texas housing market has seen home prices and rents increase, but Houston still is seeing declining rents and occupancy rates, the Dallas Fed said.
Natural gas is helping to fuel the economic improvement in Texas. The state is now exporting about 15% of its natural gas production to Mexico, according to the Dallas Fed. "With the completion of new pipelines and the deregulation of Mexico's electricity markets in mid-2014, U.S. natural gas exports to Mexico have increased 71%; over the same period, average electricity prices in Mexico have fallen 12% from 161 to 141 cents per kilowatt-hour."
Despite the brightening outlook for Texas and for its energy patch, the Texas Petro Index (TPI), a barometer of upstream oil and natural gas industry health, marked its 22nd month of decline in September. While there were some signs of stability among indicators used to compile the TPI, that wasn't enough to arrest its decline. The TPI fell to 149.0. Since peaking in November 2014 at 313.5, the TPI through September has lost 52.5% of its value.