Houston Economic Indicators

Houston employment grew 3.6 percent from June through September 2023, picking up from the slowdown in the three months ending in August. Employment in the oil and gas sector slowed and rig counts fell in September. Exports were flat but persistently high through August. Retail gasoline prices fell in the last week of October. Across the metro, real wage growth has been especially strong this year.

Employment

Houston grew 3.6 percent (29,807 jobs) from June through September, accelerating from the 2.9 percent growth (94,052 jobs) since September 2022 (Chart 1). Growth has been varied across industries, with professional and business services and construction slowing in the last three months, while financial activities and other services picked up. Leisure and hospitality grew a whopping 15.8 percent, adding 12,770 jobs over the previous three months and more than making up for summertime job losses in the sector.

Energy employment slowed in the three months ending in September, with the oil and gas sector losing 177 jobs in the metro. However, since September 2022, the sector has added 4,651 jobs, a 7.1 percent increase and the highest rate of any industry.

Energy

Rig counts continue to fall as WTI jumps, mining-related jobs tick up

In September, the price of West Texas Intermediate averaged $89—hitting a daily average of over $93 at its peak—but the U.S. rig count fell to 631 (Chart 2). This further demonstrates the unlinking of rig counts and crude oil prices, which had moved more in tandem prior to the pandemic, as shown by the overlapping green and black lines prior to 2020 in Chart 2.

Houston’s mining-related jobs have still not recovered from the oil bust in 2015–16 or the pandemic recession. Employment in these industries, which include direct oil and gas extraction positions as well as related industries like engineering services and fabricated metals manufacturing, is still 6.4 percent below February 2020 levels and 25.3 percent below December 2014 levels.

Real exports through Houston ports flatten in September

Real oil and gas exports through the Houston–Galveston customs district dipped in August to $10.3 billion, down from a high of $10.7 billion in March 2023 (Chart 3). Petroleum and coal products also saw month-over-month declines, with $3.6 billion moving through Houston in August compared with $4.3 billion at the peak in December 2021.

Retail fuel prices fall in October

During the week of Oct. 30, the nominal prices of diesel and gasoline fell to $4.12 and $2.89, respectively (Chart 4). Compared with that week last year, the price of diesel is down 17.1 percent, and the price of gasoline is down 5.9 percent, though the two are still relatively high by historical standards. The price of crude oil ticked up to $90 a barrel during the week of Oct. 23 (equivalent to $2.14 per gallon), as OPEC and Russian production cuts, geopolitical uncertainty and flooding in Libya impacted supply. In September, the Energy Information Administration estimated that crude oil made up about 55 percent of the retail price of gasoline nationally and 46 percent of retail diesel prices.

Earnings

Growth in the Houston Employment Cost Index (ECI) slowed sharply in late 2022 and early 2023, dropping from gains of 6.1 percent year over year in second quarter 2022 to 2.6 percent in second quarter 2023. In contrast, the ECI for Dallas and the U.S. slowed more gradually. For the year ending third quarter 2023, the Houston ECI rose 3.9 percent, surpassing Dallas–Fort Worth’s increase (3.8 percent) but still behind the nation’s rise (4.6 percent) (Chart 5).