DALLAS, Oct. 24 (UPI) -- Even though job growth was slower than last year, a senior economist in Texas said the recovery in crude oil prices suggested recovery was on the way.
"Broad indicators of the Texas economy continue to point toward moderate growth," Keith R. Phillips, assistant vice president of the Federal Reserve Bank of Dallas, said in a statement.
The bank warned earlier this year that the pressure from low oil prices was spilling over to other parts of the economy, with banks in southern U.S. states facing increasing risk. Crude oil prices, despite short-term volatility, have been steady at around $50 per barrel for most of October.
The Dallas Fed said the state added 20,700 jobs last year. Year-to-date, job growth has increased at an annualized rate of 0.9 percent, against a 1.3 percent rate last year. The bank said it expected a rate of 1.2 percent for full-year 2016.
Total oil production in Texas for July, the last full month for which the state published data, was 85.3 million barrels, a preliminary volume that would be the low point for the year if accurate. Year-on-year, total production for the No. 1 oil state in the country is lower by about 18 percent.
The Dallas Fed said that, in terms of stock values, there were increases posted for most Texas companies and permits for oil and gas wells increased. Oilfield services company Schlumberger, which has offices in Houston and is the largest company of its kind, said last week the oil market is in balance and recovery is on the way.
The bank official said job growth was apparent, though unemployment rates growth in five of the nine major metropolitan areas in Texas last week.
"With the stabilization of the energy sector in the second and third quarters and continued growth in the service sectors, such as health care and leisure and hospitality, jobs in the Texas economy are likely to continue to grow at a moderate pace in the months ahead," Phillips said.