Austin Economic Indicators
Austin economic activity held steady in April. The Austin Business-Cycle Index continued to grow well above trend. Although job growth softened in April, the unemployment rate remained low. Wages continued to rise, aiding home affordability.
Austin Business-Cycle Index
The Austin Business-Cycle Index expanded at a 7.0 percent rate in April (Chart 1). While above the 6.0 percent long-term pace, growth softened slightly compared with March and has slipped since peaking in the second half of 2017. This was due in part to weaker job growth of 1.6 percent in April.
Unemployment Rate Lowest Among Major State Metros
Austin’s unemployment rate held at a low 3.0 percent for a third consecutive month in April (Chart 2). This is well below the April state and U.S. jobless figures, which were at 4.1 and 3.9 percent, respectively. The local labor force expanded at a strong 4.7 percent annualized pace year to date.
Recent Job Growth Continues Upward Trend
Austin jobs grew at a healthy 2.9 percent annualized rate over the three months through April (Chart 3). Growth was generally positive across industries, although manufacturing and health care shed jobs at a notable rate. Construction continued to lead growth, adding nearly 2,000 jobs over this time. Other services, and trade, transportation and utilities also expanded at a brisk pace, particularly due to wholesale trade jobs. Professional and business services, leisure and hospitality, and information services all continued to add jobs at a healthy clip.
With the Dallas Fed’s fourth quarter early benchmark, Austin job growth for last year saw a slight downward revision. Total employment slipped from 3.3 percent to 2.7 percent, primarily due to slower growth in business services and hospitality than earlier estimates suggested.
Wage Growth Strong
Hourly wages in Austin rose to a new high in April, and the three-month average of $29.18 was well above the U.S. and Texas averages (Chart 4). Year-over-year wage growth was 3.6 percent, higher than the state rate of 1.0 percent and the national average of 2.6 percent. Year to date, Austin’s annualized growth of 6.5 percent more than doubled last year’s rate of 3.1 percent.
New-Home Permits Surging
Permits for Austin new home construction rose in April (Chart 5). Year-over-year growth in the five-month moving average was 8.6 percent, compared with 5.2 percent for the state. Meanwhile, home inventories increased slightly to 2.5 months’ supply, well below the six months considered a balanced market.
Austin Home Affordability Improves
Austin housing affordability increased in first quarter 2018, with the percentage of homes sold that the median-income family could afford rising to 60.1 percent from 57.6 percent in fourth quarter 2017 (Chart 6). This is slightly higher than the 59.6 percent affordability for the rest of the Texas Triangle. This is due to the low affordability in Dallas, where just 49.8 percent of homes are affordable to the median-income household.
NOTE: Data may not match previously published numbers due to revisions.
About Austin Economic Indicators
Questions can be addressed to Christopher Slijk at email@example.com. Austin Economic Indicators is released on the first Thursday of every month.