Austin Economic Indicators
September 6, 2019
The Austin economy posted a solid performance in July. The Austin Business-Cycle Index has increased strongly in recent months due to rapid job growth and a lower unemployment rate. Jobs were added in most industries, although health and education services continued to contract. Hourly wages fell in July, while housing construction permits picked up and home sales increased.
The Austin Business-Cycle Index accelerated to an annualized rate of 8.5 percent in July (Chart 1). Strength in the index so far this year can be attributed to a lower unemployment rate and stronger job growth, indicating robust expansion in the metro’s economy.
Tight Labor Market Continues
Austin’s unemployment rate ticked up to 2.7 percent in July (Chart 2). The unemployment rates for the nation (3.7 percent) and state (3.4 percent) remained the same as in June. This year through July, the metro’s labor force expanded 0.9 percent annualized, much slower than the 3.6 percent in 2017 and 2.7 percent in 2018—suggesting an increasingly tight labor market in Austin.
Job Growth Strong for Most Industries
The first-quarter benchmark adjustment released in mid-August resulted in an upward revision for job growth (from 1.8 percent to 3.6 percent) for first quarter 2019. In the three months ending in July, jobs in Austin grew an annualized 4.6 percent (Chart 3). Information jobs—software publishers, newspaper publication, motion picture and video industries—decelerated to a still-high 17.0 percent annualized, or a net 1,500 jobs. Payrolls within the professional and business services, trade, transportation and utilities, and leisure and hospitality industries all posted healthy growth during this period. Construction jobs, which saw a sharp drop of 17.0 percent annualized in July, saw no gains in the three months ending in July. Government and health and private education services jobs continued to decline.
Hourly Wages Fall
The three-month moving average of private sector hourly wages for the metro area ticked down to $28.67 in July (Chart 4). Austin wages decreased 3.8 percent year over year, whereas wages declined 0.3 percent in the state and climbed 3.2 percent in the nation. A portion of the recent downtick in the metro’s average wage may be due to compositional effects, where the rapidly growing trade, transportation and utilities and leisure and hospitality sectors dragged down the average.
Home Construction Permits Pick Up This Year
In July, the five-month moving average for total housing (single family and multifamily) construction permits increased 5.8 percent, well above the 0.7 percent rate in Texas (Chart 5). From December 2018 to July 2019, this measure has increased 31.2 percent, suggesting continued strength in building activity. This differs from the state, where home construction permits expanded 2.0 percent during the same time period.
Metro Home Sales Up From Last Year
The median home price in Austin increased to $314,497 in July, up 1.3 percent from a year prior. This is slightly slower than the 1.8 percent growth in Texas’ median home price, which stood at $241,196. Existing-home sales in the metro expanded at a healthy 3.8 percent in July and were 6.0 percent higher than the average monthly sales volume in 2018 (Chart 6). Sales activity is slightly slower at the state level, where home sales grew 2.9 percent in July and were 4.5 percent higher than the average monthly sales from last year.
NOTE: Data may not match previously published numbers due to revisions.
About Austin Economic Indicators
Questions can be addressed to Judy Teng at email@example.com. Austin Economic Indicators is released on the first Thursday of every month.