Texas’ economic expansion continued as higher oil prices led to record-level production despite pipeline bottlenecks in the Permian Basin. Employment at the state level extended its two-year growth spurt, but the rate of increase decelerated as firms grappled with a shortage of workers. Rising inflation chipped away at recent wage gains, but tightness in the labor market could provide additional upward pressure.
Third-quarter housing sales decreased as higher interest rates and affordability constraints hindered demand on the lower-end of the market. On the trade front, exports stalled amid the ongoing trade dispute with China and the strong trade-weighted value of the dollar. The recent announcement of the U.S.-Mexico-Canada Trade Agreement, however, resolves significant uncertainty regarding Texas’ largest trade partners.
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