Full text of El Paso Economic Indicators : August 2010

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Federal Reserve Bank of Dallas, El Paso Branch

August 2010

ECONOMIC UPDATE
El Paso Business-Cycle Index
The recovery in El Paso paused this
summer. The El Paso business-cycle
index posted a decline of 4 percent
annualized rate in July, after a slight
decline of 0.4 percent in June. This is
most likely due to a contraction in
employment, particularly in government-related employment. Private
employment in El Paso continues on
the rise.
In addition, a recent slowdown in
both the U.S. industrial sector and the
maquiladora industry in Ciudad Juarez
may contribute to the cooling of the

Labor Market
El Paso nonfarm employment decreased in July at an 8 percent annualized rate. The job losses were
concentrated in the serviceproviding sectors, in particular in
the government and leisure and
hospitality sectors. The goodsproducing sectors posted a jump of
12 percent annualized rate. As a
result of the recent labor market
softness, the unemployment rate
jumped to 9.6 percent from 9.3
percent in June. The Texas unemployment rate now stands at 8.2
percent, while the national rate is
at 9.5 percent.

EL PASO

Index Jan. 2000=100
116
112
108
104
100
96
00

SOURCE: Federal Reserve Bank of Dallas, El Paso Branch.

local economy. It is still too early to
say that the recovery came to a halt,
as regional economic data, in par-

ticular employment data, are
subject to significant revisions.

Employment Growth
Month-over-Month Annualized Growth Rates
El Paso
Nonfarm Employment

Feb-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

0.0

10.1

4.9

6.3

-5.5

-8.0

Goods Producing

0.0

-7.3

7.9

-7.3

12.0

Construction, Mining & Natural
Resources

8.2

-14.7

17.2

8.2

-7.6

17.0

Manufacturing

-7.0

0.0

7.6

-7.0

7.6

Services Providing

0.0

12.6

4.5

6.1

-5.3

-10.3

Trade, Transportation & Utilities

6.8

9.2

2.2

-2.2

2.2

4.5

Information

0.0

Financial Activities

-9.8

0.0

22.8

0.0

-9.7

Professional & Business Services

-3.7

40.2

3.8

3.7

Educational & Health Services

-12.7

22.6

3.4

-3.3

3.4

Leisure & Hospitality

19.6

14.2

-4.3

9.2

0.0

-4.3

Other Services

0.0

13.9

-12.2

0.0

Government

-1.8

3.6

11.2

19.2

-19.0

-35.2

Unemployment Rate

9.3

9.5

10.0

9.6

9.3

9.6

Nonfarm Employment

9.1

2.9

4.9

9.0

0.0

Unemployment Rate

7.8

7.5

7.2

6.7

6.2

Nonfarm Employment

0.0

1.8

13.2

15.0

7.2

Unemployment Rate

8.9

9.0

8.0

7.7

8.2

Midland-Odessa

Las Cruces

NOTE: Seasonally adjusted data. Data may not match previously published numbers due to data revisions.
SOURCES: Federal Reserve Bank of Dallas with data from the Bureau of Labor Statistics.

Federal Reserve Bank of Dallas, El Paso Branch

August 2010

ECONOMIC UPDATE

EL PASO

Trade and Border Crossings
Total trade through El Paso has
been growing since mid-2009,
climbing 47 percent. In June, total
trade increased by 2.6 percent
from the previous month. Imports
were up 6 percent, while exports
declined by 2 percent.

El Paso Border Crossings
Jan-2006=100, SA
140

Nominal exchange rate

Pesos per dollar
15

130
120

Truck crossings

110

100
12
90

In the local retail sector, El Paso
sales tax rebates increased at a 10
percent annualized rate in June.

80
70
60

In July, the number of personal vehicles crossing into El Paso from
Ciudad Juarez increased strongly,
while pedestrian crossings showed
a slight contraction. At the same
time, truck crossings declined in
spite of an increase in trade and
modest growth in maquiladora activity in Juarez.

Housing Market
El Paso housing sales contracted in
June by 13 percent from the same
month a year ago. However, year
to date, home sales have increased
by 19 percent. In June, the median
home price was $139,800, while
months of inventory continue to
hold at 6.8 months. Single-family
building permits—a leading indicator for the housing sector—have
increased 15 percent over the past
three months. This indicator has
improved significantly and suggests that the El Paso housing market continues to stabilize, following
the footsteps of the national hous2

11
Vehicle
crossings

10
9

2006
2007
2008
2009
2010
SORUCES: Texas A&M International University; Texas Center for Border Economic and
Enterprise Development; Banco de Mexico.

ing market.

Economic Conditions in Juarez
and Chihuahua
The U.S. industrial sector remains
on an upward trend, although
growth rates have begun to moderate. Furthermore, the ISM manufacturing index and new orders index (a leading indicator for the industrial sector) continue to signal
expansion. Formal employment in
the manufacturing sector in the
state of Chihuahua continues on
the rise but at a slower pace.
We developed a model—based on
U.S. industrial production index
and Chihuahua manufacturing employment—to track Juarez maquiladora employment since 2006.
The model indicates that Juarez

maquiladoras have been expanding their payrolls during the past
year. However, in July Juarez maquiladoras employment increased
at a 5 percent annualized rate
compared with an average of 15
percent increase over the previous
11 months. Anecdotal evidence
corroborates that maquiladoras
have begun to see a slowdown in
production orders. This is mostly
due to an end of the inventory
build-up phase, as firms are now
reaching desired levels of inventories.

Neighboring Metro Areas
The Midland–Odessa labor market
has remained unchanged over the
past couple of months. In spite of
this, the unemployment rate has
declined and now stands at 6.2

Federal Reserve Bank of Dallas, El Paso Branch

August 2010

ECONOMIC UPDATE
percent. Oil-directed drilling in the
Midland–Odessa area continues to
flourish due to the high and rising
oil prices, and as a result regional
economic activity has begun to
stabilize and even pick up in certain sectors.
Las Cruces nonfarm employment
has posted strong job gains over
the past three months. In July,
non-farm employment in Las Cruces jumped by a 7.2 percent annual-

EL PASO

ized rate. The unemployment rate,
however, continues to rise and
now stands at 8.2 percent.

in both MSAs might have reached
bottom.

Midland–Odessa housing sales
have increased by 33 percent over
the past three months. The median
home price stands at $153,000.
Permits for new homes in the Midland–Odessa area, as well as for
Las Cruces, continue to stabilize,
suggesting that the housing market

U.S. Manufacturing and Maquiladora Industry
Year-over-Year
Percent
20
15
10
5
0
-5
-10

U.S. IP Index

-15

Juarez Maquiladora Employment

-20

Juarez Maquiladora Employment --- FRB El
Paso Estimate

-25
-30
2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Note: Seasonally Adjusted Data
Source: INEGI , Federal Reserve Board, and Federal Reserve Bank of Dallas, El Paso Branch

Questions regarding El Paso Economic Update report can be addressed to Roberto Coronado at roberto.coronado@dal.frb.org

Full text of El Paso Economic Indicators : August 2010

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