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Economic Analysis

December 2015

 

Weak job growth and hammered commodity prices brought down Amarillo’s economy in December.

The Employers’ Survey shows gains of only 600 jobs with all gains coming in Leisure and Hospitality (Hotels, Motels and Restaurants). We lost 400 manufacturing jobs during the last 12 months. Our Household Survey shows a loss of 3,000 jobs and this goes along with our thinking that Obamacare mandates have killed part time jobs. Lubbock’s Employers Survey shows a gain of 2,900. Midland/Odessa is up 3,300. We feel that all of West Texas will see low employment gains in 2016 due to the oil slump.

Retail sales are up only 3% from a year ago. New car sales are down 6% and used car sales are flat. Our dealer customers report that the last quarter always has lower sales, but this year was worse than years past.

Residential starts are about flat with last year and year to date are down by 5%. Mortgage rates are exactly where they were last year and last week’s Fed announcement shouldn’t do anything to raise them in the short term.

While home sales boomed in the first 9 months of the year, we did see average selling prices go down. This doesn’t mean house prices are down, but it shows that the smaller houses are selling at a stronger clip than higher priced homes.

The commodity disaster continues. Our bank thinks this downturn is different from 2008 and 2009. That drop off was due to lower demand stemming from the nationwide recession. The drops we see today are due to an oversupply in every market meaningful to the Panhandle. Supply driven downturns always last longer than demand driven downturns.

Cattle have had their worst 3 months ever. With Fat Cattle prices at $119, we are hearing of losses per head between $350-$600. Dairy margins are at their lowest levels in the last 6 years.

The price of oil is in the mid $30’s and might stay at these levels for 2 or 3 years. The same goes for natural gas, which is under $2 at $1.78.

There are only 13 drilling rigs operating in the Panhandle this month, down from 71 a year ago and around 90 at the top.

Inflation is mostly flat. Some grocers are reporting deflation in their animal proteins. We will follow these trends very closely.

  

December 2015Current MonthLast MonthLast Year

Index*

176.28

181.02

208.26

Sales Tax Collections

$5,735,586

$6,847,363

$5,581,221

Sales Tax Collection-YTD

$74,423,000

$68,687,414

$72,301,581

New Vehicle Sales

884

1,254

943

Used Vehicle Sales

2,498

2,786

2,479

Vehicle Registrations (Stickers)

13,825

18,421

13,760

Airline Boardings

28,568

28,147

28,188

Hotel/Motel Receipt Tax

$497,420

$533,955

$483,043

Population - Corporate Amarillo

191,514

191,514

191,514

Employment - CLF

128,800

 128,800

132,000

Unemployment Rate

3.20%

3.20%

3.30%

Total Workers Employed (Household Survey)

124,700

124,700

127,700

Total Workers Employed (Employers Survey) 

118,600

118,300

118,000

Average Weekly Wages

$801.12

$801.12

$783.18

Gas

62,293

62,211

67,784

Water Connection

69,233

69,391

69,176

Interest Rates: 30 Year Mortgage Rates

4.13%

4.13%

4.13%

Building Permits Dollar Amount

$48,650,851

$31,070,373

$36,667,178

Year to Date Permits

$434,688,172

$386,123,821

$508,665,950

Residential Starts

34

64

396

Year To Date Starts

385

351

 406

Median House Sold Price

$138,500

$155,000

$143,000

Drilling Rigs In Panhandle

13

16

71

Oil Price Per Barrel

$36.86

$42.50

$57.00

Natural Gas

$2.36

$2.45

$3.65

Wheat Per Bushel

$4.07

$4.30

$5.57

Fed Cattle Per CWT

$119.00

$128.00

$163.00

Corn Per Bushel

$3.80

$4.01

$3.97

Cotton (Cents Per Pound)

$57.80

$60.30

$65.20

Milk

$15.00

$16.00

$20.60


 

 *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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