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ECONOMIC UPDATE: EL PASO El Paso non-farm employment remained unchanged in May. Year to date, El Paso has added 2,600 new jobs, representing a 0.9 percent increase. During May, the job gains were in the services producing sectors. The educational and health services, professional and business services and government sectors lead the growth with increases of 7.5 percent, 3.8 percent, and 1.8 percent, respectively. In spite of no job losses during the month, the unemployment rate increased to 5.6 percent, from 5.2 percent in April. In April, retail sales tax rebates increased by 1.9 percent. El Paso's business-cycle index increased 4.9 percent in April despite sluggish U.S. economic growth and weakening manufacturing activity in Juárez. 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 Dec-07 4.5 0.0 8.2 -5.8 5.1 6.3 -20.4 0.0 8.1 0.0 -4.4 0.0 13.7 5.9 Jan-08 Feb-08 Mar-08 Apr-08 May-08 5.4 2.2 1.7 2.2 0.0 0.0 3.5 -3.3 -6.6 -3.4 0.0 8.1 0.0 -7.5 8.1 0.0 0.0 -5.9 -5.9 -11.5 6.2 2.0 2.5 3.5 0.5 0.0 0.0 4.1 -4.0 -2.0 0.0 0.0 -20.8 26.2 -20.8 10.9 0.0 0.0 10.8 0.0 57.7 -10.6 7.8 11.8 3.8 7.6 0.0 3.7 3.7 7.5 4.6 4.6 -4.4 4.6 0.0 16.7 16.5 -14.2 0.0 -14.3 -8.8 9.6 5.6 3.7 1.8 5.7 5.3 5.6 5.2 5.6 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) 1.9 121.9 Apr-08 0.4 119.7 Mar-08 -1.5 119.2 Feb-08 -1.2 121.0 Jan-08 2.5 122.5 Dec-07 -2.9 119.5 Nov-07 4.2 123.2 Oct-07 -4.1 118.2 Sep-07 0.7 123.2 Aug-07 12.2 122.3 Jul-07 -13.1 109.0 Jun-07 9.8 125.5 May-07 -5.6 114.3 Apr-07 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 2008 Research Department El Paso Branch Federal Reserve Bank of Dallas June 24, 2008 ECONOMIC UPDATE: CD. JUAREZ Juarez continued posting job loses in April, at an 8.1 percent annualized rate. Year-to-date, employment is down by more than 8,000 jobs, a 2.2 percent decline. During April, job losses were concentrated in the goods producing sector, with manufacturing posting the largest decline at 16.9 percent annualized rate. In March, retail sales increased by 1.3 percent. U.S. industrial production registered a 0.1 percent year-over-year fall in May, after growing at a decreasing rate over the last three months. Mexico’s industrial production grew at a 1.6 percent rate in February, after growing at 3.5 percent in January. 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 continue to follow suit in the next few months. Cd. Juarez Employment Growth Cd. Juarez Retail Sales Month-over-Month Annualized Rates Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 Total -1.4 0.6 -4.8 -3.4 -8.9 -8.1 Goods Producing -4.7 -2.0 -9.7 -8.5 -11.5 -16.2 -21.4 2.7 -3.0 16.6 3.3 -12.8 Manufacturing -4.9 -5.1 -12.6 -10.9 -8.9 -16.9 Construction -1.6 46.8 33.7 22.1 -37.2 -6.8 5.8 6.9 6.1 7.8 -3.5 10.5 Transportation and Public Utilities -6.6 0.9 -3.3 15.3 5.9 4.7 Trade 15.5 5.5 9.5 1.4 -5.7 1.1 2.2 9.2 5.7 10.8 -3.7 18.6 Agriculture & Mining Service Providing Services Note: Seasonally adjusted data Source: Banco de Mexico, Sucursal Ciudad Juarez with data from Instituto Mexicano del Seguro Social Mar-08 Feb-08 Jan-08 Dec-07 Nov-07 Oct-07 Sep-07 Aug-07 Jul-07 Jun-07 May-07 Apr-07 Mar-07 Month-overMonth Percent Change 1.3 -1.0 8.4 -7.5 2.0 -2.3 -0.8 2.3 -2.1 2.4 10.2 -6.3 1.8 Index (2003=100) 132.6 130.9 132.2 122.0 131.9 129.3 132.4 133.5 130.4 133.3 130.2 118.1 126.1 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 June 24, 2008
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