For immediate release: June 28, 2006
Texas Housing, Globalization, Cross-Border Shopping and Wages Focus of Dallas Fed Publication
DALLAS—The latest issue of the Federal Reserve Bank of Dallas’ Southwest Economy focuses on the Texas housing market, globalization and public policy, cross-border retailing and wages.
In “Texas Housing: A Boom with No Bubble?” associate economist D’Ann Petersen finds that while housing markets in many states have started to cool, the outlook for Texas remains positive because of the state’s growing economy, increasing population and ample supply of land.
Over the past five years, Texas has experienced record-breaking new residential construction and existing home sales.
“The strengthening Texas economy and the state’s cost of living advantages drew new residents and businesses to the state, which added to the already strong housing demand,” Petersen writes.
She notes that Texas may still face potential challenges in its housing market as a result of increasing mortgage rates and rising costs for energy and construction materials.
In “Globalization and Public Policy,” senior vice president and chief economist W. Michael Cox explains that globalization helps create better public policy and higher living standards.
Countries that are more globalized practice stronger monetary policy, which in turn leads to lower inflation. More globalized nations also benefit from fewer trade restrictions, more accessible markets and better financial regulation, according to Cox.
“We should celebrate, not denigrate, globalization because it generally reflects better government polices, leading to higher living standards and freer people,” he says.
In “Border Benefits from Mexican Shoppers,” assistant economists Jesus Cañas and Roberto Coronado and senior economist Keith Phillips review presentations from a Dallas Fed conference, “Cross-Border Shopping Activity.” They conclude that retailers in Mexico are becoming increasingly sophisticated, leading to more competition for U.S. retailers.
Speakers at the conference included Coronado and Suad Ghaddar of the Center for Border Economic Studies at the University of Texas–Pan American.
Coronado found that cross-border shopping in the Rio Grande Valley and Laredo is affected by the peso’s value, while cross-border shopping in El Paso is not. Ghaddar estimated that Mexican visitors’ spending in the Rio Grande Valley supports more than 64,000 jobs.
In “Two Views on How Texans Are Doing,” senior economist Pia Orrenius and economic analyst Anna Berman find that both firm- and household-based data show that wages in Texas have risen after bottoming out in 2003.
The firm-based data show the average weekly wage in Texas was $767 in 2005, compared with the household data median weekly wage of $590. They point out that the differences in the wage findings arise from data sources and methodology.
“Although the establishment and household data may indicate different wage levels, both show recent gains, reflecting Texas’ improving economic performance,” Orrenius and Berman state.
Find the May/June issue of Southwest Economy online at www.dallasfed.org.
Phone: (214) 922-5307