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ECONOMIC UPDATE: EL PASO El Paso non-farm employment declined in January at a 4.8 percent annualized rate, after posting gains for five consecutive months. The sectors that registered the biggest declines were construction, mining and natural resources, manufacturing and other services. On the other hand, professional and business services, government, educational and health services, and trade, transportation and utilities posted job gains. In spite of the job losses, the unemployment rate remained unchanged in January at 6.4 percent. In January, retail sales tax rebates decreased by 1.2 percent. As a result of the job market weakness, the El Paso Business-cycle Index increased slightly at a 0.6 percent annualized rate in January, suggesting that the El Paso economy slowed down during the month. El Paso Employment Growth Month-over-Month Annualized Growth Rates Nonfarm Employment Goods Producing Construction, Mining & Natural Resources Manufacturing Services Providing Trade, Transportation & Utilities Information Financial Activities Professional & Business Services Educational & Health Services Leisure & Hospitality Other Services Government Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 8.0 2.7 7.0 1.8 3.6 -4.8 -9.5 -18.3 7.0 -3.3 7.0 -42.4 9.1 -8.4 19.0 0.0 9.0 -58.9 -19.4 -24.0 0.0 -5.4 5.7 -28.7 11.1 6.5 7.0 2.6 3.1 2.6 6.4 8.6 6.3 -2.0 0.0 2.1 0.0 29.4 -22.7 66.6 0.0 0.0 0.0 11.7 -10.5 11.7 -10.5 0.0 27.5 4.1 -24.7 4.2 0.0 17.6 11.7 -16.9 -7.2 3.8 0.0 3.8 -4.6 15.1 4.8 4.7 0.0 -4.5 0.0 0.0 0.0 0.0 16.5 -26.5 19.8 14.9 47.3 0.0 12.0 3.8 6.8 6.8 6.7 6.6 6.4 6.4 Unemployment Rate Notes: Seasonally adjusted data Source: Federal Reserve Bank of Dallas with data from the Bureau of Labor Statistics El Paso Sales Tax Rebates Month-overMonth Percent Index Change (1994=100) 1.2 119.2 Jan-07 -2.3 117.9 Dec-06 -0.4 120.7 Nov-06 3.4 121.2 Oct-06 2.5 117.1 Sep-06 -2.1 114.3 Aug-06 9.4 116.8 Jul-06 -8.8 106.8 Jun-06 -3.9 117.2 May-06 8.8 122.0 Apr-06 -3.4 112.1 Mar-06 2.6 116.0 Feb-06 -0.5 113.0 Jan-06 Notes: Seasonally and inflation adjusted data Source: Texas Comptroller of Public Accounts El Paso Business-cycle Index Index Jan-95=100 124 120 116 112 108 104 100 96 1995 1996 1997 1998 1999 Source: Federal Reserve Bank of Dallas, El Paso Branch 2000 2001 2002 2003 2004 2005 2006 2007 Research Department El Paso Branch Federal Reserve Bank of Dallas March 27, 2007 ECONOMIC UPDATE: CD. JUAREZ Juarez employment increased in February at a 2.5 percent annualized rate. So far in 2007, total payroll has increased by more than 1,000 jobs, a 0.3 percent growth rate. The job gains in February were widespread among sectors with the only exception being services, which registered a 1.1 percent decline. In December, retail sales slightly decreased by 0.2 percent as compared to the previous month. Please be advised that Maquiladora employment data in Mexico will not be published until sometime in 2008. As a result, to assess the current conditions of the regional maquiladora activity we have to rely on U.S. and Mexico manufacturing production indices. As the chart below shows, there is a close relationship between maquiladora employment and U.S. and Mexico manufacturing indices, which have slowed over the past few months. The most recent data indicates that the U.S. manufacturing production index increased by 0.33 percent in February, while Mexico’s manufacturing index decreased by 1.2 percent in January. Therefore, the maquiladora industry in Ciudad Juarez is likely to slowdown in the next couple of months. Cd. Juarez Retail Sales Cd. Juarez Employment Growth Month-over-Month Annualized Rates Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 0.3 -2.5 1.9 3.0 1.0 2.5 -1.3 -9.9 0.3 2.7 1.2 2.7 6.0 8.8 19.9 15.5 9.9 15.0 Manufacturing -3.6 -9.8 -1.0 3.9 1.2 2.1 Construction 33.5 -12.5 17.9 -12.3 1.0 9.9 8.4 16.1 5.2 5.8 -0.3 4.5 Transportation and Public Utilities 0.4 35.0 50.4 23.2 -8.3 11.3 Trade 1.1 7.6 3.4 3.0 9.0 11.7 15.1 18.6 -0.6 4.5 -4.4 -1.1 Total Goods Producing Agriculture & Mining Service Providing Services Note: Seasonally adjusted data Source: Banco de Mexico, Sucursal Ciudad Juarez with data from Instituto Mexicano del Seguro Social Dec-06 Nov-06 Oct-06 Sep-06 Aug-06 Jul-06 Jun-06 May-06 Apr-06 Mar-06 Feb-06 Jan-06 Dec-05 Month-overMonth Percent Change -0.2 -3.1 0.7 3.0 -0.5 1.5 2.2 -2.1 3.4 -5.1 6.4 -1.5 0.9 Index (2003=100) 120.3 120.5 124.3 123.5 119.9 120.5 118.7 116.2 118.7 114.8 121.0 113.7 115.4 Notes: Seasonally and inflation adjusted data Source: INEGI U.S. and Mexico Manufacturing Production Indices Year-over-Year Percent 20 15 10 5 0 -5 Mexico Mfg. Index -10 U.S. Mfg. Index -15 Juarez Maquiladora Employment -20 2000 2001 2002 2003 Notes: Seasonally adjusted data Source: INEGI & Federal Reserve Bank of Dallas 2004 2005 2006 2007 Research Department El Paso Branch Federal Reserve Bank of Dallas March 27, 2007
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