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ECONOMIC UPDATE: CD. JUAREZ Juarez employment increased in September at a 6.6 percent annualized rate. Year to date, total payroll has increased by almost 10,500 jobs. The job gains in September were widespread across sectors, with only the agriculture and mining, and services sectors posting job losses of 20.6 percent and 3.9 percent, respectively. In July, retail sales decreased by 1.8 percent, after showing growth in June. U.S. industrial production registered a 1.6 percent year-over-year growth in September. Mexico’s industrial production regained momentum, growing at 3.3 percent in August. As the chart below shows, there is a close relationship between maquiladora employment and U.S. and Mexico manufacturing indices, which are growing at moderate rates, as the most recent data shows; thus, it is likely that the maquiladora industry in Ciudad Juarez will follow suit in the next couple of months. Cd. Juarez Retail Sales Cd. Juarez Employment Growth Month-over-Month Annualized Rates Total Goods Producing Agriculture & Mining Manufacturing Construction Service Providing Transportation and Public Utilities Trade Services Apr-07 May-07 Jun-07 1.3 3.0 4.2 -3.9 0.3 5.8 -16.2 9.7 21.2 -5.5 -1.7 6.0 19.3 27.1 1.8 11.1 13.6 0.4 9.9 1.0 6.1 5.4 8.3 -1.9 15.3 19.9 0.9 Jul-07 Aug-07 Sep-07 7.1 4.6 6.6 11.9 4.3 10.4 3.3 -9.5 -20.6 14.6 3.8 10.0 -16.2 11.4 17.4 -7.4 6.3 1.3 11.8 30.1 2.6 5.4 -1.5 9.2 -18.1 7.3 -3.9 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 Notes: Seasonally adjusted data Source: INEGI & Federal Reserve Bank of Dallas 2003 2004 2005 2006 2007 Research Department El Paso Branch Federal Reserve Bank of Dallas October 23, 2007 ECONOMIC UPDATE: EL PASO El Paso non-farm employment declined significantly in September at a 9.8 percent annualized rate. However, year-to-date, El Paso has added 1,700 new jobs. The sectors that were responsible for the negative job postings were manufacturing, educational and health services, leisure and hospitality, and government. Trade, transportation and utilities, and financial activities were the sectors that posted job gains, while the rest of the sectors remained unchanged. Because of the job losses over the past couple of months, the unemployment rate increased to 5.9 percent in September, from 5.4 percent in August. In August, retail sales tax rebates increased by almost 1 percent, after showing strong growth in July. The El Paso Business-cycle Index increased at a 1.5 percent annualized rate in August; however, once the September employment downturn 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 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 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 1.8 4.6 6.0 5.5 -1.3 -9.8 -6.9 3.6 11.2 -13.2 -10.2 -13.5 0.0 0.0 31.0 -16.4 0.0 0.0 -11.0 6.0 0.0 -11.0 -16.3 -21.4 3.1 4.7 5.2 8.5 0.0 -9.2 0.0 8.5 2.1 4.2 -4.0 4.2 0.0 28.1 0.0 0.0 0.0 0.0 23.7 11.0 -9.9 0.0 -10.0 11.2 16.3 11.8 11.7 11.6 11.5 0.0 -3.7 -10.9 3.9 3.9 3.9 -7.4 0.0 4.7 4.7 0.0 0.0 -16.7 0.0 0.0 16.3 0.0 -14.0 0.0 2.0 4.0 8.1 21.3 0.0 -26.7 5.8 5.5 5.8 6.0 5.4 5.9 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) 0.8 123.4 Aug-07 12.6 122.4 Jul-07 -13.1 108.8 Jun-07 9.2 125.2 May-07 -4.8 114.6 Apr-07 0.8 120.5 Mar-07 0.7 119.6 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 2.9 116.8 Sep-06 -2.0 113.6 Aug-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 2000 Source: Federal Reserve Bank of Dallas, El Paso Branch 2001 2002 2003 2004 2005 2006 2007 Research Department El Paso Branch Federal Reserve Bank of Dallas October 23, 2007
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