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Southern New Mexico Economic Indicators

Economic Indicators

Second Quarter 2021

The Las Cruces economy continues to expand as it recovers from the effects of the COVID-19 pandemic. Payrolls grew for the fifth straight month in May, and Doña Ana County consumer spending outpaced that of the state. Home sales and prices remained elevated as inventories tightened further. Trade volumes, although not completely back to normal, were in positive territory year over year in April. The monthly rig count and oil production in New Mexico both rose, as did potash and copper prices.

Labor Market

Las Cruces jobs grew an annualized 18.9 percent, or by 1,021 jobs in May (Chart 1). Employment gains were particularly notable in leisure and hospitality (370 jobs), government (237), and education and health services (188). The only sector witnessing job losses was construction and mining (-93 jobs).

Chart 1

Year over year in May, Las Cruces payrolls were up over 3,600 jobs. Nearly all sectors experienced job growth, including leisure and hospitality (1,887 jobs), trade, transportation and utilities (1,017) and education and health services (914). Government and the construction and mining sectors shrank during the period by 482 and 393 jobs, respectively.

According to the latest estimates, the southern New Mexico unemployment rate stood at 8.8 percent in April, down from 9.0 percent a month prior. Luna County’s unemployment rate was the highest in southern New Mexico at 15.6 percent, while De Baca County’s unemployment rate was the lowest in the region at 5.8 percent. The unemployment rate in Las Cruces rose from 7.6 percent in March to 7.7 percent in April. Conversely, the jobless rate in the state of New Mexico fell from 8.1 percent in April to 8.0 percent in May.

Consumer Spending

Doña Ana County consumer spending (as measured by credit and debit card spending) has risen above its prepandemic level (Chart 2). As of May 30, spending in the county was up 15.8 percent from January 2020, compared with an increase of 12.6 percent in New Mexico.

Chart 2

Housing Market

The six-month moving average of annualized existing-home sales in Las Cruces totaled 2,802 in May, up 30 percent from the same month last year (Chart 3). As home sales have strengthened, so have home prices. In May, the median price in the Las Cruces metro was $219,084, up 7.6 percent from May 2020’s median of $203,520. The inventory of existing homes was down to just one month in March, compared with 3.1 months in March 2020.

Chart 3

Santa Teresa Port Trade

In April, annualized total trade in southern New Mexico was $27.1 billion, 8.9 percent above a year prior, when COVID began to disrupt commerce (Chart 4). The growth in total trade was driven by strong year-over-year increases of 8.2 percent in exports and 9.5 percent in imports. Exports were $11.4 billion in April, while imports equaled $15.7 billion.

Chart 4

Commodity Markets

Rig Count, Oil Production Climb

The rig count rose from 67 in April to 73 in May (Chart 5). Similarly, oil production volumes rose 16.9 percent to a record 1.13 million barrels per day in March compared with a month prior.

Chart 5

Potash and Copper Prices Rise

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 increased slightly from $193.28 per metric ton in April to $198.92 in May (Chart 6). Copper prices climbed from $9,283 per metric ton in April to $10,478 in May.

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.