Amarillo’s economy slowed down in February, with less retail sales and lower commodity prices.
Compared to 12 months ago, retail sales were down 6%. Year to Date sales are down 3%. New car sales are up 33%, as financing has become very competitive. Used car sales are up 3%.
Wages are reporting being down 3%. We think this is due to the Government Shutdown last month. We will watch this number, as all indications continue to show a tight job market.
Mortgage rates are under 5% and residential construction has slowed. There were 30 housing starts last month, which is down 50% from a year ago.
Lower energy commodity prices and continued operational problems at the natural gas gathering plant have slowed down drilling activity in the Panhandle. There are 11 drilling rigs operating, compared to 17 a year ago. Natural Gas prices are under $3 today and Oil has rebounded a little to the mid $50’s.
Feedyards and Dairies are having a rough start to 2019. Some pens are making money in Feedyards, but the majority are just breaking even with prices flat from last year. Dairy’s margins remain squeezed with lower milk prices ($13.75).
Planting in 2019 should mirror last year. Wheat is limping along, but there are some cattle currently turned out on certain wheat fields.
February is the month that Texas adjusts their employment numbers, so we will have a full report in next month’s Pulse.
*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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