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Permian Basin Economic Indicators

Economic Indicators
Midland–Odessa economy dashboard (fourth quarter 2023)
Job growth (annualized)
Dec. '22–Dec. '23
Avg. unemployment rate
Avg. hourly earnings Avg. hourly earnings growth
  3.0% 2.6% $33.03 -0.9%

Permian Basin employment and wages rose during fourth quarter 2023, while the unemployment rate fell. The region’s rig count and the price of oil notably declined. Also, the inventory of existing homes in Midland–Odessa increased slightly.


Oil prices drop

An increase in the global supply of crude oil yielded a nearly balanced oil market in the fourth quarter. With markets having taken into account OPEC and its allies’ voluntary cuts, average oil prices eased from $91 per barrel in the third quarter to $72 per barrel in the fourth (Chart 1). Weak economic data out of China also contributed to lower oil prices.

Chart 1

Oil production climbs, again

Oil production continued to climb, reaching an all-time high of 5.92 million barrels per day in the third quarter, up 8 percent year over year (Chart 2). The oil rig count in the Permian Basin declined in the fourth quarter, down 12 percent year over year, hitting its lowest level since early 2022. The U.S. rig count fell 19 percent.

Chart 2


Midland’s wages on the rise, while Odessa’s fall

Hourly earnings rose 4.7 percent in Midland but decreased slightly in Odessa during the fourth quarter (Chart 3). The gap between wages in Midland and Odessa has narrowed considerably year over year (25 percent), but from September to December, an uptick in wages in Midland allowed that gap to widen 38 percent. The tight labor market was responsible for the bump in wages as Midland had the lowest unemployment rate in the state in December. In 2023, Odessa’s wages rose 5.5 percent and Midland’s declined by 1.5 percent. For comparison, wages rose 4.1 percent in the U.S. and 5.9 percent in Texas.

Chart 3

Employment growth strong in 2023

In 2023, the Permian Basin saw solid job growth of 3.0 percent (Chart 4). That growth was above Texas’ (2.7 percent) and the U.S.’ (1.7 percent). The boom in energy job growth seen in early 2023 slowed down in the latter half of the year. The first six months of the year saw a 9.5 percent increase in mining, logging and construction jobs, while the last six months, these jobs declined 0.3 percent.

Chart 4

In the fourth quarter, leisure and hospitality was the only sector to experience job losses (-1.9 percent). Trade, transportation and utilities saw robust growth of 16.4 percent. That growth is a marked turnaround from the 11.0 percent job decline the sector saw in first quarter 2023.

Unemployment declines

Midland’s unemployment rate fell during the fourth quarter to 2.2 percent, and it dropped in Odessa to 3.0 percent, with the average for the basin being 2.6 percent (Chart 5). Unemployment rates were higher in both Texas (4.1 percent) and the U.S. (3.7 percent). Labor force participation increased 3.4 percent in 2023 in Midland, while in Odessa it only increased 2.4 percent. Over the same period, labor force participation rose 1.5 in the U.S. and 3.4 percent in Texas.

Chart 5


Midland–Odessa’s supply of existing homes for sale increased from 2.1 months to 2.2 in fourth quarter 2023. That figure is lower than Texas’ 3.5 months of inventory (Chart 6). The three-month moving average for months of inventory was 2.2 in both Midland and Odessa. These inventories remained below six months, which is considered a balanced housing market.

Chart 6


NOTES: Employment data are for the Midland–Odessa metropolitan statistical area (Martin, Midland and Ector counties), unless otherwise specified. Energy data include the 55 counties in West Texas and southern New Mexico that make up the Permian Basin region. Data may not match previously published numbers due to revisions.

About Permian Basin Economic Indicators

Questions or suggestions can be addressed to Kenya Schott at Permian Basin Economic Indicators is released quarterly.