Amarillo’s economy showed measured growth during this last month, as retail sales and better commodity prices boosted the economy.
Retail sales were up 3.2%, with tracking the YTD at 3.8%. New vehicles were up 10% (though prices are getting high), while used were up 7%.
The job market is still tight, and wages are up 4% from a year ago. There are 1,100 more people working than this time a year ago, according to the Household Survey. The Employer’s Survey shows jobs are exactly flat with a year ago. Employer’s Surveys for Lubbock (+4,100) and Midland/Odessa (+10,600) show booming job growth. Our bank is hearing that Oil Field activity in the Permian Basin is higher than the boom times of 2011-2014.
Higher interest rates have not slowed housing, even though mortgage rates are a full 1% higher than one year ago. Residential Starts were up 36% for August, bringing the YTD to a 27% increase. Building Permits were 28% lower than 12 months ago, but the YTD is up 12%, and our Construction In Progress number (Six Months Trailing Building Permits) is up 7%. Medium House price is up 2%, as about 300 houses sell each month in Amarillo.
Airline Boardings continue strong, up 17% from a year ago, while the Motel Tax is up 3.2%.
Oil and Gas continues its upward march, with a 50% increase in the price of oil (while natural gas prices are flat). The number of Drilling Rigs in the Panhandle almost doubled last year’s.
Corn prices are up 3% from last year, and this year’s crop was fair, with most of it going towards silage. Irrigated cotton should have a good crop and prices are up 4%. Wheat prices are up 43%, and we are going to need good winter moisture to get a crop next year (there was no wheat harvest in 2018).
Feedyards are losing money on the cattle of $1.08 (down from $110 last month), unless they are hedged. Dairies are improving and are operating above break even with prices at $14.00.
Amarillo’s Unemployment Rate is at 2.8%, down from 3.1% this time last year, which is about as low as it can go, as the job market remains tight. We will watch job growth, which is the key to future economic momentum.
*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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