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ECONOMIC UPDATE: EL PASO El Paso non-farm employment declined in August at a 6.5 percent annualized rate. However, year-todate El Paso has added almost 3,000 new jobs. The sectors that were responsible for the negative job postings were manufacturing, trade, transportation and utilities, professional and business services, and government. Leisure and hospitality, and other services posted job gains while the rest of the sectors remained unchanged. In spite of the job losses in August, the unemployment rate declined to 5.4 percent, from 6 percent in July. In July, retail sales tax rebates increased significantly, by more than 12 percent, after posting a strong decline in June. The El Paso Business-cycle Index increased at a 3.4 percent annualized rate in July; however, once the August decline in employment is included in the computation of this index, it is likely that it will show a slower growth rate and perhaps even a negative growth rate. El Paso Sales Tax Rebates Month-overMonth Percent Index Change (1994=100) 12.4 122.0 Jul-07 -13.2 108.6 Jun-07 9.1 125.1 May-07 -4.8 114.7 Apr-07 0.8 120.5 Mar-07 0.7 119.5 Feb-07 1.1 118.7 Jan-07 -2.5 117.4 Dec-06 -0.4 120.3 Nov-06 3.4 120.8 Oct-06 2.4 116.9 Sep-06 -1.2 114.1 Aug-06 4.5 115.5 Jul-06 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 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 0.9 1.8 4.6 6.0 5.5 -6.5 -3.5 -6.9 3.6 11.2 -13.2 -6.9 0.0 0.0 0.0 31.0 -16.4 0.0 -5.6 -11.0 6.0 0.0 -11.0 -11.2 1.6 3.1 4.7 5.2 8.5 -6.4 2.1 0.0 8.5 2.1 4.2 -7.8 -21.9 0.0 28.1 0.0 0.0 0.0 24.1 23.7 11.0 -9.9 0.0 0.0 12.1 16.3 11.8 11.7 11.6 -3.6 0.0 -3.7 -10.9 3.9 3.9 0.0 0.0 0.0 4.7 4.7 0.0 4.6 -14.0 0.0 0.0 16.3 0.0 16.1 -1.9 2.0 4.0 8.1 21.3 -17.5 5.9 5.8 5.5 5.8 6.0 5.4 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 September 25, 2007 ECONOMIC UPDATE: CD. JUAREZ Juarez employment increased in August at a 4.4 percent annualized rate. So far in 2007, total payroll has increased by almost 8,500 jobs. The job gains in August were widespread across sectors, with only the agriculture and mining, and trade sectors posting job losses of 5.3 percent and 2.4 percent, respectively. In July, retail sales decreased by 1.8 percent, after showing growth in June. U.S. industrial production registered a 1.7 percent year-over-year growth in August. Mexico’s industrial production grew at a rate of 1.9 percent in July. As the chart below shows, there is a close relationship between maquiladora employment and U.S. and Mexico manufacturing indices, which are growing at a slower rate, as the most recent data shows; thus, the maquiladora industry in Ciudad Juarez is likely to follow suit in the next couple of months. Cd. Juarez Retail Sales Cd. Juarez Employment Growth Month-over-Month Annualized Rates Mar-07 Total Apr-07 May-07 Jun-07 Jul-07 Aug-07 2.6 1.3 3.1 4.2 6.9 4.4 -0.7 -3.9 0.4 5.8 12.3 3.0 -21.5 -12.8 6.1 21.8 6.5 -5.3 Manufacturing -2.8 -5.4 -1.6 6.0 15.2 2.7 Construction 32.2 19.1 27.0 1.7 -16.9 8.4 4.8 12.1 14.3 0.2 -8.5 8.3 Transportation and Public Utilities 5.9 10.0 0.7 5.2 10.6 34.2 Trade 9.2 5.3 8.1 -2.1 5.1 -2.4 Services 1.7 17.3 21.6 0.8 -19.6 11.1 Goods Producing Agriculture & Mining Service Providing Note: Seasonally adjusted data Source: Banco de Mexico, Sucursal Ciudad Juarez with data from Instituto Mexicano del Seguro Social Jul-07 Jun-07 May-07 Apr-07 Mar-07 Feb-07 Jan-07 Dec-06 Nov-06 Oct-06 Sep-06 Aug-06 Jul-06 Month-overMonth Percent Change -1.8 2.4 10.3 -6.1 1.8 1.5 0.9 0.1 -2.9 0.8 3.0 -0.4 2.2 Index (2003=100) 130.9 133.4 130.3 118.1 125.8 123.6 121.8 120.7 120.6 124.2 123.2 119.6 120.2 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 September 25, 2007
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