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Southern New Mexico Economic Indicators

Economic Indicators

Fourth Quarter 2020

The southern New Mexico economy continued its partial recovery in October at a swifter pace than in previous months. Daily COVID-19 cases and deaths broke previous records in November, while mobility and engagement remained depressed. Despite month-to-month improvements, employment, the unemployment rate and small business conditions have not recovered to pre-COVID-19 levels. The rig count and potash prices remained relatively unchanged, while oil production volumes and copper prices fell on a monthly basis.

Labor Market

Since the onset of the pandemic, Las Cruces jobs were down an annualized 11.6 percent (-5,871 jobs nonannualized) in October (Chart 1). Employment losses were particularly notable in leisure and hospitality (-2,913 jobs nonannualized) and education and health services (-948 jobs nonannualized). From September to October, payrolls fell an annualized 2.6 percent (-153  jobs nonannualized), largely driven by losses in the government sector (-360 jobs nonannualized).

Chart 1

Similarly, the state labor market shrank an annualized -10.6 percent (-62,500 jobs nonannualized) between February and October. Declines in New Mexico employment were led by leisure and hospitality (-20,800 jobs nonannualized), construction and mining (-12,500 jobs nonannualized) and education and health services (-8,800 jobs nonannualized). In October, New Mexico payrolls grew an annualized 2.6 percent (1,700 jobs nonannualized).

The jobless rate in southern New Mexico stood at 10.3 percent in September (latest data available), down from 11.7 percent a month prior. Luna County’s unemployment rate was the highest in southern New Mexico at 20.8 percent, while De Baca County’s jobless rate was the lowest in the region at 5.2 percent. Meanwhile, the unemployment rate in Las Cruces fell from 11.3 percent in August to 9.3 percent in September (latest data available). Similarly, New Mexico’s unemployment rate fell from 9.9 percent in September to 8.1 percent in October.

COVID-19 Cases and Deaths and Local Mobility Trends

After peaking in July, daily COVID-19 cases fell in August and through mid-September in Doña Ana County. Since then, the seven-day moving average of daily cases in Doña Ana County has been rising rapidly. As of Nov. 22, cases reached 322.9 per day (Chart 2). Daily COVID-19-related deaths have also climbed quickly, reaching 4.1 deaths per day on average as of Nov. 22.

Chart 2

The Dallas Fed’s Mobility and Engagement Index (MEI) for Doña Ana County bottomed out April 13 (-81.1 percent); it trended upward through June but has been flat to down since. This means Doña Ana County residents left their homes less often, traveled shorter distances from their homes and stayed at other locations for shorter amounts of time as stay-at-home orders were implemented and the economy partially closed once again. With the pandemic worsening locally and restrictions tightening, the Doña Ana County MEI was down 42.8 percent during the week of Nov. 14 compared with January levels.

Small Business Conditions

Data from Womply, a service provider to small businesses, suggested that the number of small businesses open and net revenues remain well below pre-COVID-19 levels. As of Nov. 9, the number of small businesses open in Doña Ana County was down 49.4 percent relative to January, and net revenues at small businesses were down 35.2 percent relative to January (Chart 3).

Chart 3

Santa Teresa Port Trade

In May, annualized total trade in southern New Mexico plunged 76.9 percent compared with a year prior—the sharpest year-over-year decline on record. While trade rebounded to $23 billion in September, total trade was still down 27.2 percent from a year prior (Chart 4). The drop in total trade was driven by declines of 34.6 percent in exports and 21.2 percent in imports. Exports totaled $9.3 billion, while imports equaled $13.8 billion in September.

Chart 4

Commodity Markets

Rig Count, Oil Production Growth Flat

The rig count in October remained at 45, its lowest level since January 2017 (Chart 5). Similarly, oil production volumes fell 0.9 percent to just over 1 million barrels per day in August (latest data available) compared with a month prior.

Chart 5

Potash Prices Hold Steady, Copper Falls

In addition to oil and natural gas, southern New Mexico's economy is dependent on other commodities, such as potash, copper and silver. Potash prices remained relatively stable, increasing slightly from $203.32 per metric ton in September to $204.48 in October (Chart 6). Copper prices fell from $6,827 per metric ton in September to $6,740 per metric ton in October.

Chart 6

NOTES: Data may not match previously published numbers due to revisions. All New Mexico counties within the Federal Reserve’s Eleventh District are counted as part of southern New Mexico. Las Cruces is excluded from southern New Mexico to better gauge unemployment levels outside the region’s largest population center.

About Southern New Mexico Economic Indicators

Questions can be addressed to Keighton Hines at Keighton.Hines@dal.frb.org. Southern New Mexico Economic Indicators is released quarterly.