, Jan. 31, 2023 /PRNewswire/ -- The Comerica Texas Economic Activity Index rose at a 2.7% annualized rate in the three months through October and was up 6.4% from a year-ago.
Five of the index's nine components rose in October. Employment rose 58,800 in October, around the average pace of the first three quarters of last year. However, seasonally-adjusted active oil-drilling rigs fell in the month. Energy prices moderated in the second half of last year and are down from early 2022 levels. High operating costs and labor shortages are constraints on higher energy activity.
Housing starts rebounded in October, following a steep decline in the third quarter. Going forward, Texas's housing market is set to be a big drag on the state's economy, as surging mortgage interest rates and high prices sideline would-be homebuyers. House prices declined for a fourth consecutive month in October, and further declines are likely into 2023. However, price declines in the Lone Star State are likely to be shallower than in many other states due to the state's strong economic fundamentals, such as strong population and employment growth.
Texas GDP rose a sharp 8.2% annualized in the third quarter of 2022, following lackluster growth in the first half of last year. The rebound of the Comerica Texas Index in October shows the state economy entered the final quarter of 2022 on solid footing. However, high inflation, surging interest rates, a softening national economy, and weak economies outside the US will be persistent headwinds in Texas, likely holding its growth below trend in 2023.
The Comerica Texas Economic Activity Index is a monthly composite indicator of state economic activity. The Index provides a wholistic advance view of the state of Texas's economy, using economic data that are available about one quarter earlier than real GDP is released. The index is comprised of nine components: Nonfarm payroll employment, continuing claims for unemployment insurance, housing starts, house prices, industrial electricity sales, the Texas rotary rig count, foreign trade, hotel occupancy, and sales tax revenue. All data are seasonally adjusted with nominal values converted to constant dollar values as appropriate. To filter out month-to-month volatility in the index components, the index is calculated from the three-month moving averages of its components. Values for a minority of components are projected from the prior months' release due to the timing of data releases.
Comerica Bank is a subsidiary of Comerica Incorporated (NYSE: CMA), a financial services company headquartered in Dallas, Texas, and strategically aligned by three business segments: The Commercial Bank, The Retail Bank and Wealth Management. Comerica focuses on relationships, and helping people and businesses be successful. In addition to Texas, Comerica Bank locations can be found in Michigan, California, Florida and Arizona. Additionally, Comerica has select businesses operating in Canada and Mexico. Comerica reported total assets of $85.4 billion as of Dec. 31, 2022.
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SOURCE Comerica Bank