Job growth in the Dallas-Fort Worth metroplex remained well above the U.S. average at the start of the fourth quarter. In October North Texas posted 2.3 percent year-over-year job growth, while the U.S. average stood at 1.5 percent. In another piece of good news, this August’s payroll employment in North Texas exceeded its pre-recession peak of 2.99 million, set in February 2008. Despite the positives coming from broad labor market indicators, some iconic North Texas companies are struggling. At the end of November, American Airlines will have operated under bankruptcy protection for a calendar year. The airline cites significant progress in restructuring costs, but the flight plan for emerging from bankruptcy remains unclear. American’s pilots will announce the results of their vote on a new contract on December 7. Texas Instruments has announced that it will lay off 1,700 workers globally, including 500 in North Texas in 2013. Twinkie maker Hostess Brands, based in Irving, appears to be heading for liquidation, with about 100 jobs in North Texas in jeopardy. This churn in marquis companies highlights the rapidly evolving nature of the regional economy. Recessions represent periods of accelerated economic creative destruction. It feels like one of the legacies of the Great Recession is that accelerated creative destruction continues. While the destruction part of the cycle is often very visible, especially in the case of well-established and branded companies, the creative part is usually less visible. Indirectly, we see the results of economic creativity as North Texas re-takes its pre-recession employment peak.
The price for West Texas intermediate crude oil has drifted down over the last year to near $85 per barrel, still an attractive price for drillers. The oil rig count for Texas has stabilized at about 700 rigs since last May. Natural gas prices have recently climbed to about $3.60 per MMBTU, still somewhat weak. The gas rig count has declined steadily over the last year to 158 rigs as of late November, about half of what it was last January. Midstream and downstream operations for natural gas remain very active, even as the drilling boom subsides.
Click here for a PDF version of the complete 2012Q4 North Texas Regional Economic Update: NorthTexas 2012Q4.