Austin Economic Indicators
The Austin economy continued to expand at a solid pace in June. The Austin Business-Cycle Index grew near its long-term trend. Although labor markets remained constrained, the metro posted solid employment growth. Wages continued to edge up, manufacturing activity grew moderately, and the housing market remained strong.
The Austin Business-Cycle Index expanded at a 6.1 percent annualized rate in June, similar to May’s pace and near the long-term rate of 6.0 percent (Chart 1). The index has grown within 1 percentage point of its long-run average since mid-2016 after several years of growth over 7 percent.
Unemployment Rate Remains Low
Austin’s unemployment rate ticked up to 3.0 percent in June but remained well below its long-run (January 1990–December 2017) average of 4.3 percent and less than the 4.0 percent rate for both the state and the nation (Chart 2). The metro’s labor force growth picked up in June and has grown an annualized 3.5 percent in the first half of the year, faster than Texas’ 3.3 percent and the U.S.’ 1.9 percent growth.
Job Growth Remains Healthy
Austin payrolls expanded at a sturdy 2.5 percent annualized rate over the three months through June (Chart 3). Growth was spread across most industries, with only professional and business services and health and education services declining. The dip in professional and business services employment was due to a drop in its administrative, support and waste management services component; the professional, scientific and technical services component increased during the period. Leisure and hospitality payrolls strengthened a blistering 11.1 percent during the period, adding 3,400 net new jobs. Year to date, construction and mining employment has surged 8.3 percent, while only the health and education services sector has declined.
Wages Continue to Climb
Hourly wages in Austin inched up in June after ticking down in May, but the three-month moving average has increased for eight months in a row (Chart 4). Average hourly wages remain well above the U.S. and Texas levels. Year over year, average wages in Austin rose 3.1 percent in June, compared with a 2.7 percent rise for the U.S. and a 2.2 percent increase for Texas.
Austin Purchasing Managers Index
The Austin Purchasing Managers Index indicated continued but subdued growth in the area’s manufacturing sector in June (Chart 5). The six-month moving average of the headline index held steady at 53.2 for the month, below the postrecession (January 2010–December 2017) average of 56.4. The new orders, inventory and order backlog indexes signaled growth in June, while the production, employment, supplier delivery and prices indexes indicated contraction.
Austin existing-home sales contracted 2.0 percent in June, representing 59 fewer homes sold than in May, 11.2 percent below its all-time high (Chart 6). The metro’s total existing-home sales so far this year have grown 4.6 percent compared with the same period last year, outpacing the state’s 2.8 percent growth.
Home inventories held steady at 2.6 months, well below the six-month supply considered a balanced market. The median home price ticked up and was less than $1,000 shy of its all-time high reached in December 2017.
NOTE: Data may not match previously published numbers due to revisions.
About Austin Economic Indicators
Questions can be addressed to Stephanie Gullo at firstname.lastname@example.org. Austin Economic Indicators is released on the first Thursday of every month.