Southern New Mexico Economic Indicators
Third Quarter 2020
The Southern New Mexico economy continued its partial recovery in July after experiencing historic contractions due to the COVID-19 pandemic. Despite recent improvements, employment, the unemployment rate, consumer spending and trade have not yet recovered to pre-COVID-19 levels. While rig count, production volumes and potash prices fell, copper prices were up from year-ago levels.
Las Cruces jobs were down an annualized 11.5 percent (-5,074 jobs nonannualized) year to date in July (Chart 1). Employment losses were particularly notable in leisure and hospitality (-2,787 jobs nonannualized), government (-692 jobs nonannualized) and education and health services (-401 jobs nonannualized). From June to July, payrolls grew an annualized 2.5 percent (0.2 percent nonannualized, or 142 jobs) as employment in the metro sluggishly recovered from sharp contractions earlier in the year due to the pandemic.
Similarly, the state labor market shrank -14.3 percent (-74,200 jobs nonannualized) year to date in July. Declines in New Mexico employment were led by leisure and hospitality (-23,300 jobs nonannualized), construction and mining (-11,700 jobs nonannualized), professional and business services (-8,500 jobs nonannualized), government (-8,100 jobs nonannualized) and education and health services (-6,700 jobs nonannualized). From June to July, New Mexico payrolls weakened an annualized 8.7 percent (0.8 percent nonannualized, or -6,000 jobs).
In June, the Southern New Mexico unemployment rate stood at 7.6 percent, down from 8.4 percent a month prior. Luna County’s unemployment rate was the highest in Southern New Mexico at 15.5 percent, while De Baca County’s unemployment rate was the lowest in the region at 4.2 percent. Meanwhile, the unemployment rate in Las Cruces fell from 8.5 percent in May to 8.0 percent in June. New Mexico’s unemployment rate rose from 8.3 percent in June to 12.6 percent in July.
Doña Ana County consumer spending (measured by credit and debit card spending) has recovered ground since bottoming out in late March when weekly spending was down 38.3 percent from January 2020 levels (Chart 2). However, beginning in early July, consumer spending slipped again. As of Aug. 2, spending in the county was down 19.6 percent from January 2020, compared with a decline of 13.3 percent in New Mexico.
Annualized existing-home sales in Las Cruces fell 1.9 percent to 2,111 from June to July (Chart 3). The median price of homes sold in Las Cruces rose to $196,123—a monthly annualized increase of 1.6 percent.
Santa Teresa Port Trade
In May, annualized total trade in Southern New Mexico plunged 76.4 percent year over year, the sharpest year-over-year decline on record. While trade rebounded to $22 billion in June, total trade was still down 22.9 percent from a year prior (Chart 4). The drop in total trade was driven by declines of 38.4 percent in exports and 7.9 percent in imports. Exports were $8.7 billion, while imports equaled $13.3 billion in June.
Rig Count and Oil Production Decline Further
The rig count fell in July to 49 rigs, its lowest level since February 2017 (Chart 5). Similarly, the latest oil production totals fell 0.7 percent to 881,000 barrels per day in May compared with a year prior.
Copper Prices Rise, Potash 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 fell in July to $199.36 per metric ton, down from $261.65 a year ago (Chart 6). Conversely, copper prices increased from $6,115 per metric ton in July 2019 to $6,580 per metric ton in July 2020.
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.