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ECONOMIC UPDATE: EL PASO El Paso non-farm employment increased in December at a 3.6 percent annualized rate. Overall in 2007, El Paso added 3,000 new jobs, representing a 1.1 percent increase. During December, the job gains were widespread among sectors with only the information, and leisure and hospitality sectors registering job losses. In spite of job gains in December, the unemployment rate jumped to 6 percent, from 5.6 percent in November. In December, retail sales tax rebates increased by 2.6 percent. The El Paso Business-cycle Index increased at a 3.1 percent annualized rate in December. On a year-over-year basis, the El Paso Business-cycle Index posted an increase of almost 2 percent, indicating a solid 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 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 2.7 -1.3 -9.4 7.4 0.4 3.6 -10.4 -10.4 -13.8 7.7 3.8 11.7 -16.6 0.0 0.0 -8.8 9.6 9.6 -5.9 -16.8 -22.1 20.7 0.0 13.2 4.7 0.0 -8.7 7.4 0.0 2.6 2.0 -4.0 10.6 12.7 -5.8 4.1 0.0 0.0 0.0 -21.2 0.0 -21.5 0.0 -10.0 11.2 0.0 0.0 0.0 7.9 12.0 0.0 -3.7 -3.7 0.0 0.0 3.8 -13.8 7.7 3.8 0.0 4.7 0.0 -12.8 4.7 0.0 -8.8 0.0 -14.0 0.0 0.0 0.0 0.0 10.1 0.0 -28.2 14.8 6.0 12.3 6.0 5.4 5.9 5.4 5.6 6.0 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) 2.6 123.0 Dec-07 -2.9 119.9 Nov-07 4.3 123.4 Oct-07 -4.0 118.4 Sep-07 0.7 123.2 Aug-07 12.3 122.3 Jul-07 -13.1 108.9 Jun-07 9.0 125.3 May-07 -4.5 115.0 Apr-07 0.8 120.4 Mar-07 0.7 119.5 Feb-07 1.4 118.7 Jan-07 -2.7 117.0 Dec-06 Notes: Seasonally and inflation adjusted data Source: Texas Comptroller of Public Accounts El Paso Business-cycle Index Index Jan-95=100 128 124 120 116 112 108 104 100 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 February 26, 2008 ECONOMIC UPDATE: CD. JUAREZ Juarez employment decreased in January at a 4.5 percent annualized rate. In 2007, total payroll increased by almost 8,000 jobs, representing a 2.1 percent increase. The job losses were widespread across sectors during January. Only the construction, trade and services sectors posted job gains. On the other hand, manufacturing posted a decline of 12.6 percent, translating into a loss of approximately 2,700 jobs. This decline is related to the slowdown in industrial activity in the U.S. during the last quarter of 2007. In December, retail sales declined by 6.3 percent. U.S. industrial production registered a 2.1 percent year-over-year increase in January. Mexico’s industrial production grew at a 1.0 percent rate in December. As the chart below shows, there is a close relationship between maquiladora employment and U.S. and Mexico manufacturing indices, which have posted sluggish growth rates in the recent months; thus, it is likely that the maquiladora industry in Ciudad Juarez will follow suit in the next few 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 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 4.0 7.4 -6.2 -2.5 0.0 -4.5 2.6 9.0 -4.7 -6.4 -3.2 -9.6 -9.7 -21.7 -21.0 -21.3 0.0 -6.8 2.1 8.6 -2.3 -6.6 -6.2 -12.6 10.5 16.6 -29.4 -3.2 42.5 34.2 5.3 1.6 -3.4 5.8 6.3 6.4 28.9 -0.6 -4.2 -7.9 -0.6 -5.4 -0.7 10.4 6.1 16.9 5.8 10.9 5.2 -3.5 -9.1 1.6 8.1 5.9 Note: Seasonally adjusted data Source: Banco de Mexico, Sucursal Ciudad Juarez with data from Instituto Mexicano del Seguro Social Dec-07 Nov-07 Oct-07 Sep-07 Aug-07 Jul-07 Jun-07 May-07 Apr-07 Mar-07 Feb-07 Jan-07 Dec-06 Month-overMonth Percent Change -6.3 1.6 -2.5 -0.9 2.3 -1.9 2.4 10.2 -6.1 1.7 1.5 -0.4 1.8 Index (2003=100) 123.0 131.3 129.2 132.5 133.7 130.7 133.2 130.1 118.0 125.8 123.7 121.9 122.4 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 Note: Seasonally adjusted data Source: INEGI & Federal Reserve Bank of Dallas 2004 2005 2006 2007 2008 Research Department El Paso Branch Federal Reserve Bank of Dallas February 26, 2008
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