Houston Truck Deals will focus on the thorny issue of unemployment today.
Unemployment numbers show that unemployment benefit applications were up 2,171 for the week of February 12th, the latest week for state data. The increase is largely due to redundancies and layoffs from the insurance and manufacturing sector, with the rest of the Texan economy enjoying some growth.
With national unemployment rates at 9%, a lot more needs to be done to bring unemployment down and to bolster consumer confidence which is reliant on a strong job market.
The housing market is the biggest drag on the economy for both Texas and the country as a whole. It was the housing market which sparked the financial crisis we are only now just emerging from. Banks made large amounts of loans to poorly qualified applicants who were amongst the very first casualties of the downturn in the recession. As defaults on low quality loan books mounted, a crisis of confidence emerged amongst the banks who had traded in the loan books around the world. Bank liquidity evaporated and the credit squeeze was on with businesses unable to borrow to finance purchases and leading to layoffs leading to record unemployment and a crash in the housing market.
Until the housing market is picked up out of the doldrums, it will continue to act as a drag chain on the economy. Recent proposals from the US Treasury to abolish the $1.6 trillion mortgage interest tax credit will do nothing to help a housing market recovery.
Meanwhile, oil is now over $100 a barrel however there appears to be no substantive reason why. The Middle East is a hotbed right now, however supplies have largely been unaffected, primarily because there are substantial stocks of oil on hand plus Canada and Russia along with unaffected OPEC countries have been picking up any slack.
Overall, the outlook for the Texan economy is positive with isolated examples of high positive growth, notably the trucking and logistical industries.