Letter from President Robert S. Kaplan

The Eleventh District economy had a strong year in 2017. Texas job growth was 2.1 percent, and the unemployment rate reached 3.9 percent in the fourth quarter, the lowest unemployment rate since the data began being compiled in the 1970s. Texas continues to be a magnet for people and firms, the state's economy continues to diversify, and the energy industry has stabilized and continues to recover from its recent downturn.

Dallas Fed economists expect this strong growth to continue in 2018. In addition, our economists expect solid gross domestic product growth in the U.S. due to a strong consumer as well as improved business investment.

Against this backdrop, our team at the Dallas Fed is focused on improving our economic research and overall thought leadership, particularly in the areas of energy, trade and immigration. We are also striving to be a leading citizen in our communities by actively working on early childhood literacy, college readiness, the digital divide, access to financial services and workforce development. We continue to emphasize our core operations of supervising financial institutions in our district, performing cash services, and working with other Federal Reserve Banks to oversee various types of payment and Treasury services in our district and nation.

Dallas Fed President Robert S. Kaplan thanks the Houston Branch staff for their dedicated service during Hurricane Harvey.

While advancing our mission, the Dallas Fed and each of our branches, beginning in August of last year, faced a critical challenge along with our fellow Texans: the devastating impact of Hurricane Harvey.

In this annual report, we concentrate primarily on the hurricane and the myriad ways the Federal Reserve Bank of Dallas worked to serve our communities before, during and after this terrible storm. We highlight the work of our Houston Branch and key areas of our Bank, which worked closely with state and local agencies and nonprofit and community leaders to help identify and support those most affected by this natural disaster. I am particularly proud of the performance of all our employees in the Eleventh District in responding to this tremendous challenge.

All of us at the Dallas Fed are honored to serve our district and nation. We look forward to actively pursuing our mission in 2018 and the years ahead.

Sincerely,

Robert S. Kaplan

Annual Report 2017