High commodity prices, strong retail sales and increasing wages set the stage for persistent inflation in our area.
Amarillo has nearly 3,000 more people working than last year according to our Household Survey. The Employers Survey has almost 4,000 more people working. Wages are up 3%, but overall are up more since we are comparing with a time last year where employers had not yet hired their staffs back from the shutdowns.
Retail sales are up 9% from 12 months ago. Year to date Retail Sales are up 13% from 2020.
New car sales are down 26% from a year ago, but area dealers report that they are seeing an uptick in deliveries. Used Car Sales are down 10%, with lack of buyers, low inventory and higher used prices.
Airline Boardings have nearly doubled from a year ago and the Hotel/Motel tax collections are up 32%.
Amarillo Housing has had a giant year. Compared to last year, we are seeing a very tight market.
Construction in Amarillo is up from last year. Year to Date Building Permits are up 28%, and compared to 12 months ago, they are up 474%, due to a large ground cable job and a new storage facility, along with several other large commercial renovations.
Drilling activity has slowed in the Panhandle, with only 3 rigs on line compared to 6 months ago. Last year at this time, there weren’t any drilling rigs operating. Oil prices are up 101% from a year and are above $80. Natural gas prices are up 61% from a year ago.
Harvest has been successful in the Panhandle and corn prices are up 35% at $5.72. Cotton prices are down 18% from a year ago, but the crop is the best in decades. Wheat prices are up 45%.
Cattle prices are up 19%. Milk prices are down 18%.
Stimulus and Inflation
Inflation has finally been recognized by the national media; however, Washington, D.C. continues to deny it is a problem. Consumers are especially concerned with gasoline and grocery prices, but inflation seems to be universal, with varying degrees in different industries. Supply chain disruptions ease the narrative on why prices are being raised. Inventories in most industries remain at low levels.
Recent inflation was reported at 6.5% nationally, compared to 12 months ago, but the monthly rate for October was 11%, compared to the month before.
Below are some of the factors in these inflation numbers:
Year over Year Changes
Stimulus money continues to abound. The child credit tax payments will continue for 2 more months, along with higher food stamps. States, Counties, Cities and School Districts continue to receive funds, although the receipt is staggered and somewhat unpredictable. Amarillo will still have over $100 million in stimulus money, but the areas in which it can be used are often prescribed by Washington regulations. This overall stimulus continues to slosh through the economy and coupled with supply shortages, inflation could remain a problem for the next year.
Wages are up, but less than inflation. Recently announced wage increases probably cover the inflation for the average over the last 2 years. Our report shows wages up 3% in Amarillo and up 4% in Lubbock; however, these are
*Base-100, January 1988
This document was prepared by Amarillo National Bank on behalf of itself for distribution in Amarillo, Texas and is provided for informational purposes only. The information, opinions, estimates and forecasts contained herein relate to specific dates and are subject to change without notice due to market and other fluctuations. The information, opinions, estimates and forecasts contained in this document have been gathered or obtained from public sources believed to be accurate, complete and/or correct. The information and observations contained herein are solely statements of opinion and not statements of fact or recommendations to purchase, sell or make any other investment decisions.
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