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ECONOMIC UPDATE: EL PASO El Paso non-farm employment increased in March at a 2.3 percent annualized rate. The sectors that registered job gains were construction, mining and natural resources, trade, transportation and utilities, and professional and business services. On the other hand, manufacturing, information, educational and health services, other services and government posted job losses. As a result of the job gains, the unemployment rate declined in March to 5.9 percent, from 6.5 percent in February. In March, retail sales tax rebates increased by 0.7 percent. The El Paso Business-cycle Index increased at a 3.2 percent annualized rate in March, after two months of decline, suggesting that the El Paso economy resumed growth. 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 El Paso Sales Tax Rebates Month-overMonth Percent Index Change (1994=100) 0.7 121.2 Mar-07 0.7 120.3 Feb-07 1.2 119.4 Jan-07 -2.3 118.0 Dec-06 -0.4 120.8 Nov-06 3.4 121.3 Oct-06 2.5 117.3 Sep-06 -2.1 114.5 Aug-06 9.4 116.9 Jul-06 -8.8 106.9 Jun-06 -3.9 117.3 May-06 9.5 122.1 Apr-06 -3.5 111.5 Mar-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 -4.0 4.7 7.0 -7.4 0.9 2.3 -3.5 0.0 11.2 -37.4 -10.5 3.8 0.0 10.1 21.0 -54.2 0.0 22.1 -5.5 -5.5 5.8 -24.8 -16.0 -5.7 -4.1 5.4 6.4 -2.1 2.6 2.1 -15.3 -2.1 2.1 -6.1 8.7 6.4 0.0 0.0 28.1 0.0 0.0 -21.9 -10.4 11.6 0.0 0.0 0.0 0.0 4.1 21.9 4.0 12.4 4.0 21.2 -20.3 3.9 -7.3 7.9 -3.7 -3.7 9.7 4.7 9.6 -4.5 0.0 0.0 59.1 -14.2 0.0 -14.3 16.7 -14.3 2.0 8.2 19.1 -7.5 0.0 -1.9 6.7 6.6 6.4 6.4 6.5 5.9 Unemployment Rate Notes: Seasonally adjusted data Source: Federal Reserve Bank of Dallas with data from the Bureau of Labor Statistics 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 May 22, 2007 ECONOMIC UPDATE: CD. JUAREZ Juarez employment increased in April at a 1.2 percent annualized rate. So far in 2007, total payroll has increased by almost 2,400 jobs, a 0.6 percent growth rate. The job gains in April were widespread among sectors with the only exception being the agriculture and mining and manufacturing sectors, which registered 22.7 percent and 4.3 percent declines, respectively. In February, retail sales increased by 1.3 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, we have to rely on U.S. and Mexico manufacturing production indices to assess the current conditions of the regional maquiladora activity. 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 decreased by 2.1 percent in April, while Mexico’s manufacturing index decreased by 0.4 percent in March. 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 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 Total 2.2 3.3 1.2 2.5 2.6 1.2 Goods Producing 0.7 3.2 1.4 2.3 -0.5 -2.7 Agriculture & Mining 20.7 18.7 7.9 8.8 -20.5 -22.7 Manufacturing -0.8 4.4 1.2 1.3 -2.6 -4.3 Construction 19.7 -11.2 3.7 14.7 32.4 21.8 5.7 7.3 -0.7 5.0 3.1 10.1 48.3 24.8 -9.0 9.5 5.0 9.7 Trade 3.7 3.2 9.5 12.2 9.5 5.6 Services 0.4 6.9 -5.2 -0.2 -1.2 13.4 Service Providing Transportation and Public Utilities Feb-07 Jan-07 Dec-06 Nov-06 Oct-06 Sep-06 Aug-06 Jul-06 Jun-06 May-06 Apr-06 Mar-06 Feb-06 Note: Seasonally adjusted data Source: Banco de Mexico, Sucursal Ciudad Juarez with data from Instituto Mexicano del Seguro Social Month-overMonth Percent Change 1.3 0.6 -0.1 -3.0 0.7 3.0 -0.4 1.8 1.9 -2.1 3.4 -3.8 4.1 Index (2003=100) 122.8 121.2 120.5 120.6 124.4 123.5 119.9 120.5 118.4 116.2 118.7 114.9 119.5 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 May 22, 2007
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