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DALLASFED
FIRST QUARTER 2014

Southwest
Economy

2014

Now Hiring

}

Texas to Remain a Top State
for Job Growth in 2014
PLUS
ffTexas Leads Nation in Creation of Jobs at All Pay Levels
ffOn the Record: Federal Reserve Historian Seeks to Expand
Access to Central Bank Records

ffSpotlight: Health Coverage Misses Many in DFW, Texas

PRESIDENT’S PERSPECTIVE

total, the state
}Ingained
272,300 jobs
in 2013, a 2.5 percent
annual growth rate
that outpaced the
national average by 0.8
percentage points.

ollowing the Civil War, Gen. Philip Sheridan commanded an army in Texas and famously quipped,
“If I owned Texas and hell, I would rent Texas
and live in hell.” My hunch is that were Sheridan
around today, he might be of a different opinion and would
move to Texas, as so many other Americans have, to take
advantage of the strong growth prospects here.
With output totaling approximately $1.4 trillion, the
Texas gross domestic product roughly equals that of Spain
or Australia. And Texas remains a top state for job growth,
as Keith Phillips and Christopher Slijk discuss in this issue
of Southwest Economy.
Employment here has expanded at twice the pace of
the nation as a whole since 1990. Over that nearly quartercentury, the number of jobs in Texas is up 60 percent,
compared with 18 percent in California and less than 8
percent in New York. Unlike the nation as a whole, Texas
bounced back relatively strongly following the recession,
regaining its prerecession employment levels by late 2011
and expanding another 6 percent since then. And despite
what the critics contend, Texas is creating more high-paying
than low-paying jobs, as Melissa LoPalo and Pia Orrenius
explain in another Southwest Economy article.
Diverse industries have contributed to the state’s
economic expansion. While the oil and gas extraction and
mining support sectors added an outsized 13,200 jobs last
year, seven other sectors created far more. In total, the state
gained 272,300 jobs in 2013, a 2.5 percent annual growth
rate that outpaced the national average by 0.8 percentage
points.
I encourage you to read the reports from Keith and
Christopher and Melissa and Pia for more insights into the
trajectory and breadth of the Texas economic expansion.
The state is in a strong position for continued growth. Had
Gen. Sheridan acquired Texas, his return on investment
would have been astronomical, as the stock of the state
keeps rising.

Richard W. Fisher
President and CEO
Federal Reserve Bank of Dallas

Texas to Remain a Top State
for Job Growth in 2014

2014

Now Hiring

By Keith R. Phillips and Christopher Slijk

economy continued
}The
to expand broadly,
with employment in oil
and gas, leisure and
hospitality, professional
and business services,
and construction growing
strongly.

Chart

he Texas economy in 2014 is
well positioned to continue expanding and will likely remain
among the nation’s fastest
growing. Employment grew 2.5 percent
last year, down from 3.3 percent in 2012
but 0.7 percentage points above the
national average.
Weakness in manufacturing and
cuts in federal spending contributed
to the state’s job growth slowdown.
Still, the economy continued to expand
broadly, with employment in oil and
gas, leisure and hospitality, professional and business services, and construction growing strongly.
Even with slower job expansion,
Texas remained the third-fastest-growing
state in 2013, trailing only North Dakota
and Florida (Chart 1). Oil- and gas-producing states—leaders in the early years
of the U.S. recovery—no longer predominated. This reflects the energy sector’s
slowing expansion, although two states
with the strongest shale activity, Texas
and North Dakota, remained near the
top. Meanwhile, several Sunbelt states
hit hard by the housing crisis—Florida,

Georgia and Arizona, for instance—are
beginning to bounce back. In these
states, employment remains significantly
below the prerecession peak; in Texas, it
is significantly above.
While Texas jobs grew at a healthy
pace, the unemployment rate changed
little overall, dropping to 6 percent in December 2013 from 6.2 percent at the end
of 2012. The unemployment rate rose
through May 2013 because new entrants
to the workforce outpaced new jobs created by 0.4 percentage points.
As job growth continued in the latter
half of the year and labor force expansion leveled, the unemployment rate fell
steadily. As a result, the Texas unemployment rate in December remained below
the 6.7 percent nationwide figure. Real
gross domestic product in Texas also
outpaced the nation, growing 3.8 percent
on a year-over-year basis through third
quarter 2013 compared with 2 percent
for the nation (see box, page 5).
This year Texas will likely continue
growing at a moderate, above-average
pace and will outpace most U.S. states.
Headwinds from cuts in federal gov-

Texas Posts Third-Fastest Job Growth Among States in 2013

Percent change*

5
4
3
2

Texas
U.S.

1
0

ND
FL
TX
OR
GA
DE
AZ
SC
W
A
CO
NV
IN
UT
US
M
S
M
A
M
N
CA
NC
W
I
M
I
HI
SD
M
D
ID
W
Y
M
O
OK
TN
M
E
NY
IL
AR
NE
W
V
VT
LA
IA
VA
NH
RI
KS
CT
M
T
AL
OH
NM
KY
PA
NJ
DC
AK

–1
*December-over-December change; seasonally adjusted.
SOURCES: Bureau of Labor Statistics; Federal Reserve Bank of Dallas.

Southwest Economy • Federal Reserve Bank of Dallas • First Quarter 2014

by late 2011, and jobs have since expanded 6.3 percent. Meanwhile, the nation is
still 0.7 percent (1 million jobs) below its
peak reached in January 2008 (Chart 2).
Though the Texas recovery has been robust, the sources of strength have differed
from past recoveries, which typically
have been led by housing and consumer
spending. Instead, growth in the early
years of the recent recovery was driven
more by gains in energy and exports.
Growth in most industries in Texas
moderated last year (Chart 3). Although
construction expanded at a healthy 3
percent in 2013, this was a bit less than

ernment spending should dissipate,
while manufacturing sector expansion is expected to increase as U.S. and
world economies improve. Energy and
construction are anticipated to remain
strong. Recent increases in leading
indicators suggest that Texas nonfarm
employment should pick up 2.5 to 3.5
percent in 2014.

Texas’ Expansion Continues
Economic growth in Texas, unlike the nation, bounced back relatively
strongly following the recession. Texas
reached prerecession employment levels

Chart

Texas Jobs Continue to Grow Beyond 2008 Peak

Index, January 2000 = 100

130
125
120

Texas prerecession
job peak

115
Texas

110
105

U.S prerecession
job peak
U.S.

100
95
90

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

SOURCES: Bureau of Labor Statistics; Federal Reserve Bank of Dallas.

Chart

Most Texas Industries Slowed in 2013

Manufacturing Year-End Pickup

(Annual job growth by year, 2010–13)

Manufacturing experienced very
sluggish growth during 2013, with a
moderate pickup toward year-end. Until
October, sector employment was virtually unchanged. Jobs in manufacturing
of durable goods fell slightly, while those
involved in nondurable goods remained
flat. Much of this is attributable to flat exports, a consequence of continued weakness of the world economy. In particular,
the Mexican economy, which accounts
for more than one-third of Texas exports,
contracted 2.7 percent in the second
quarter.
However, exports picked up in the
second half of 2013, rising by an annualized 16.6 percent. Much of this growth
came from Latin America and the
European Union, where exports grew at a

Percent change, December over December

Percent of total employment as of December 2013*
Trade, transp., utilities
Government
Health and education
Business services
Leisure and hospitality

20.1
16.1
13.4
13.1
10.2

Manufacturing
Finance, insurance, real estate
Construction
Energy and mining
Information services

7.8
6.1
5.5
2.5
1.8

–5
Energy Construction Trade,
and
transp.,
mining
utilities

Manu- Business Finance, Leisure Information Health Government
facturing services insurance,
and
services
and
real estate hospitality
education

*Not all industries included; percentages do not total 100.
SOURCES: Bureau of Labor Statistics; Federal Reserve Bank of Dallas.

half the previous year’s rate. Similarly,
energy continued to decelerate from
peak expansion in 2011, and sectors such
as financial, business and health services
experienced weaker growth.
The information services sector was
the only area where growth significantly
accelerated last year. Print publishing,
which had declined sharply in previous
years, accounted for much of the leveling
off, along with a strong increase in data
processing and telecommunications
services.
Fiscal uncertainty was a constant
throughout 2013, from federal budget sequestration cuts in the spring to
furloughs in the summer and the federal
government shutdown in October. This
led to declines in federal government
jobs, and even more importantly, to
reduced economic growth among private
contractors that provide goods and services to the federal government.
Nationally, on-budget federal outlays
fell 11.3 percent from 2012 levels, which
likely impacted Texas about as much as
other states, as year-over-year federal
government employment in December
2013 declined 2.7 percent in Texas and
2.8 percent nationally. State and local
government jobs, on the other hand,
which make up nearly 90 percent of total
government employment in Texas, increased slightly, growing at an annual 1.4
percent rate through December.

Southwest Economy • Federal Reserve Bank of Dallas • First Quarter 2014

six-month annualized rate of 9.2 percent
and 75.4 percent, respectively. This was
closely related to an increase in Texas
manufacturing employment, which
expanded at a 4.9 percent annualized
rate from September through December.
Additionally, the Federal Reserve Bank
of Dallas’ Texas Manufacturing Outlook
Survey employment index was consistently positive beginning in June 2013.
If current trends hold and Texas exports
maintain strong growth, manufacturing
employment should continue expanding
during 2014.

Energy Remains Strong
Measures of the energy industry suggest that, even while moderating in 2013,
the sector remained strong. Job growth in
energy extraction slowed to 4.9 percent
in 2013 from a 9.5 percent rise in 2012
(see Chart 3). Oil and gas prices were
higher in 2013 than in 2012, but the rig
count was generally flat after declining in
the second half of 2012 (Chart 4). Even
though natural gas prices increased 35.4
percent to an average of $3.75 per million
British thermal units (mmBtu), prices
remained near historical lows. As a result,
much of the drilling activity was concentrated in oil-producing areas, such as the
Eagle Ford Shale in south central Texas
and the Permian Basin in West Texas,
and was less focused on natural gas regions, such as the Barnett Shale in north
central Texas.
Abnormally cold weather and the
resulting high heating-related demand
have spiked natural gas prices this winter.
However, prices are expected to return to
previous levels as the weather warms up.
Average monthly drilling permits
issued increased 6.6 percent in 2013 in
the Eagle Ford Shale, reaching a new
high, while in the Barnett Shale, permits
fell 20.5 percent and were off 76.9 percent
from their 2008 peak.
Drilling permits in the Permian Basin peaked in 2012 and declined in 2013.
Because the region is experiencing a shift
from traditional drilling to more expensive and productive horizontal hydraulic
fracturing, the drop isn’t likely representative of the value and production of
drilling, which probably increased.
The energy sector should remain

strong in 2014, with job growth the same
as or slightly slower than in 2013. While
oil and gas prices increased at the end
of 2013, oil prices for benchmark West

Chart

Texas Intermediate (WTI) crude have
been generally stable at close to $100
per barrel. Natural gas was near $4 per
mmBtu before winter demand pushed it

Rig Count Flat, Oil and Gas Prices Up From 2012 Levels

Rig count, weekly

Nominal price in dollars, weekly*

160

1,000
Texas rig count
900

140

Natural gas price

800

120

700

100

500

80
West Texas
Intermediate
60
oil price

400

300

600

200

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

*Oil price is in dollars per barrel; natural gas price is in dollars per mmBtu and is multiplied by 10.
SOURCES: Baker Hughes; Wall Street Journal; Haver Analytics.

Addressing How Real GDP Is Measured for Texas
Real gross domestic product (RGDP) estimates produced by the U.S.
Bureau of Economic Analysis (BEA) are an important data source for state
economies. While not very timely, RGDP is a comprehensive measure of the
value added of goods and services produced in a state.
In the estimates for Texas, the portion attributable to oil and gas extraction is puzzling. It is strongly negatively correlated with oil prices and with
factors of production such as energy employment and the drilling rig count.
For example, as energy prices collapsed in 2008–09, Texas energy employment slipped 12.8 percent, the rig count fell 73 percent and oil and gas
production dropped. Nonetheless, the BEA’s estimate of RGDP from oil and
gas extraction grew 24.6 percent, calling into question the accuracy of the
estimates for the sector.
A recent Dallas Fed working paper explores several potential alternatives to the official BEA estimates.1 Several approximations of RGDP in oil
and gas extraction are used to see which might be a good substitute for
BEA-produced estimates. A measure based on changes in Texas’ physical
production of oil and gas generates an estimate that appears more reasonable and is positively correlated with energy employment and the rig count.
Also, substituting this alternative measure yields an estimate of total RGDP
that is more highly correlated with Texas job growth.

Note
1
See “A Closer Look at Potential Distortions in State RGDP: The Case of the Texas Energy
Sector,” by Keith Phillips, Raul Hernandez and Benjamin Scheiner, Federal Reserve Bank of
Dallas, Research Department Working Paper no. 1308, October 2013.

Southwest Economy • Federal Reserve Bank of Dallas • First Quarter 2014

past $5. If prices remain near their 2013
levels, the rig count is likely to stay near
the high levels of 2013, and the overall
pace of activity will be similar to last year.
However, with the increased production observed last year and a lack of
corresponding growth in pipeline and
refining capacity, 2014 will likely see further increases in the midstream (transport and marketing) and downstream
(refining and processing) sectors. This
expansion will bolster overall economic
growth. Still, the U.S. Energy Information
Administration estimates that the price
difference between WTI and the costlier
Brent crude (the European light, sweet
crude benchmark), which averaged
$13 per barrel in January, will persist
throughout 2014.

Mixed Government Results
Government job growth in 2013 in
Texas varied widely: While federal jobs
fell 2.7 percent, state government saw
no net change, and local government
employment increased nearly 2 percent.
Federal budget cuts led to a persistent
decline in federal employment through
much of 2013. This drag extended beyond the immediate sector, as industries
that rely heavily on federal revenue
experienced difficulty as well. Cuts to

Chart

private-sector contractors and research
organizations account for some of the
weaker growth seen in other industries.
Federal government contracts are
more likely concentrated in areas with
larger numbers of federal jobs. El Paso,
San Antonio and the Mexico border
region (McAllen–Edinburg–Mission,
Brownsville–Harlingen and Laredo)
have more than twice the average share
of federal government employment as
the state average and, with the exception
of Laredo, all grew more slowly than the
state in 2013 (Chart 6). These areas also
have a higher proportion of jobs in health

Low Vacancy Rate Suggests Further Growth
in Office Construction

Index, May 1970 = 100

Construction Moderates
Construction job growth slowed
from a very strong 5.5 percent in 2012 to
a healthy but more moderate 3 percent
last year (see Chart 3). The deceleration was concentrated in residential
construction. While average monthly
residential contract values rose 12.8
percent in 2013, that was down from a
27 percent increase in 2012. This year,
residential construction is likely to continue expanding but at a slower pace.
Mortgage rates increased during 2013,
ending the year at 4.5 percent for 30year fixed obligations, compared with
3.4 percent at the beginning of the year.
The rise in mortgage rates as well as
increasing home prices means that potential buyers could face more difficulty
qualifying for mortgages. This is likely
why seasonally adjusted single-family
building permits fell 1.2 percent in the
three months ended in December from
the previous three-month period.
Meanwhile, a pickup in nonresidential construction is probable. The
aggregated office vacancy rate for the
Houston, Dallas, Fort Worth, Austin and
San Antonio office markets fell below
16 percent in first quarter 2013 and remained there for the year, closing at 15.4
percent in the fourth quarter (Chart 5).
In the past, growth in office-market construction occurred when vacancy rates
fell below 16 percent. Given expected
state economic expansion and tightness

in office vacancies, construction should
continue growing strongly in 2014.

Percent

300
250

Office and
bank buildings
contract
values

Office vacancy rate

200

150

15.4

100

16 percent
vacancy
threshold

50
0

’86

’88

’90

’92

’94

’96

’98

’00

’02

’04

’06

’08

’10

’12

NOTE: Shading represents Texas recessions.
SOURCES: CBRE Commercial Real Estate Resources; McGraw-Hill Construction (www.construction.com/dodge/
dodge-market-research.asp).

Chart

Areas With Large Federal Presence Grow More Slowly

Index, November 2009 = 100, seasonally adjusted

118

Percent of total employment

116

Federal Education and
govt. health services

114
112
110

Border, San Antonio, El Paso
Rest of Texas

3.5
1.4

17.5
12.7

108
106
104
102

Austin
Houston
DFW

100
98

2010

2011

2012

SOURCES: Bureau of Labor Statistics; Texas Workforce Commission.

Southwest Economy • Federal Reserve Bank of Dallas • First Quarter 2014

Border
San Antonio
El Paso
2013

care, which was negatively impacted last
year by declining federal government
grants and contracts.
Meanwhile, employment at state
universities and public schools increased
1.9 percent, buoying overall government
job growth. Although state and local government jobs expanded, they remain 1.6
percent below their peak in November
2010. The state budget is in good shape as
2014 unfolds, and net revenues (excluding trust funds) have increased 4.6 percent since the 2012 fiscal year. Continued
state economic expansion, along with
gains in property values, suggests that
state and local tax revenues and jobs will
continue growing at a healthy pace in
2014.

Chart

Texas Leading Index Components Point to Growth

Net change in Texas Leading Index
Texas Value of the Dollar

1.05
.06

U.S. leading index

.38
–.22

Real oil price
Well permits
New unemployment claims

.07
–.08
.22

Texas Stock Index

.46

Help-wanted index
Average weekly hours
–.4

–.2

.17

0
.2
.4
.6
.8
1
Three-month percentage change (October–December)

1.2

NOTE: Overall index, 1987 = 100; December 2013 = 128.6.
SOURCES: Federal Reserve Bank of Dallas; Conference Board; Wall Street Journal; Texas Railroad Commission; Texas
Workforce Commission; Bloomberg; Bureau of Labor Statistics; authors’ calculations.

Indexes Pointing Higher
The Texas Leading Index combines
movements in key state economic
indicators and is used to forecast Texas
job growth. Movements in the index’s
components in the three months ended
in December have been positive, with the
exceptions of slightly lower oil prices and
somewhat higher unemployment claims,
which result in a negative contribution
(Chart 7). The strongest of the index’s
components was a three-month increase
in help-wanted advertising in the state
as measured by the Conference Board.
Despite the slight increase in initial
claims for unemployment insurance, this
reflects an overal positive job outlook.
The gain in the U.S. leading index
suggests that the national economy will
improve this year, boosting demand
for products and services produced in
Texas. The stock prices of companies
with a large presence in Texas also rose,
indicating encouraging prospects for
earnings growth and potential gains in
employment and capital spending. An
increase in average weekly hours worked
in manufacturing and a slight decrease
in the Texas export-weighted real Value
of the Dollar are positive signs for Texas
manufacturing.1 Leading indicators of
the energy sector were mixed, with drilling well permits up and oil prices down.
Movements in the Texas Leading
Index are consistent with changes in
Texas business outlooks measured by the
Dallas Fed’s Texas manufacturing, service

sector and retail outlook surveys. The
business outlook index reading is the difference between the percentage of firms
reporting an improved versus worsened
company outlook. The manufacturing,
service sector and retail outlook indexes
all increased in the final two months of
the year, with manufacturing and retail
outlooks the strongest since February
2012. Overall, all three suggest optimism
about additional economic activity this
year.

likely continue growing faster than the
national average and most other states.

Phillips is a research officer and senior
economist and Slijk is a research assistant at the San Antonio Branch of the
Federal Reserve Bank of Dallas.
Note
A decline in the Texas export-weighted real Value of the
Dollar results in a positive contribution to the Texas Leading
Index since a fall in the dollar makes Texas exports cheaper.

Positive Outlook for 2014
The Texas economy decelerated
somewhat in 2013 from its strong performance in 2012. Slowing export growth
and reduced federal government expenditures played important roles; moderate
slowing was broad-based across most
sectors. Despite that, Texas job growth
maintained its ranking as the third-fastest
in the nation.
2014 should be another good year.
With many forecasters expecting improvement in world and U.S. economic
activity, Texas should benefit as demand
for its products and services increases.
Federal government spending is unlikely
to decline as much as in 2013. Recent
increases in the Texas Leading Index
have been strong and broad-based. Index
gains along with a pickup in job growth
suggest that 2014 employment will
increase by 2.5 to 3.5 percent. Texas will

Southwest Economy • Federal Reserve Bank of Dallas • First Quarter 2014

ON THE RECORD
A Conversation with Gary Richardson

Federal Reserve Historian
Seeks to Expand Access
to Central Bank Records
Gary Richardson was named historian of the Federal Reserve System
in 2012, in advance of the central bank’s centennial. An economics
scholar specializing in the Great Depression, Richardson discusses his
job and how long-secret records can aid policymaking.
Q. What does the Federal Reserve
historian do?
Initially, I’m helping with the centennial and working on projects relating
to education, public information and
research for the centennial. After the
centennial will come the second phase:
recommending policies regarding the
preservation, organization and dissemination of historical materials.
An organization like the Fed needs
a historian because it responds to events
that are infrequent but very severe. An
example would be the financial crisis that began in 2008. The job of the
historian is to make sure that after these
events occur, you retain the information you need for people to study them.
It might take 10, 20, 50 years before you
really understand what could have been
done, what should have been done and
what we should do the next time one of
these rare events occurs.
After 2008, we see a big pattern
where we’ve had periods of great success and stability that have ended in big

financial crises. We really want to figure
out what’s going on so the next time we
get to a period of great success and great
stability, we’ll be aware of what the trigger signs are, and we will have a better
understanding of how decisions that led
to great success could also contribute to
the buildup of risk.

Q. What theme from the Fed’s first
100 years resonates most with
you?
People should recognize how successful the Federal Reserve has been.
It’s an institution that people don’t think
about most of the time. That’s because
it’s successful. The payments system
works, interest rates are smooth, people
can get credit. Financial institutions
have plenty of liquidity. Crises come
along like 9/11, and the financial system
keeps working. This is something people
should be amazed by.
The attack on 9/11 was a deliberate
attempt by al-Qaida and its leaders to
bring down the U.S. financial system. By
destroying the World Trade Center, they
were hoping to disrupt the operations of
financial institutions. The attack failed
to have its intended effect in large part
because of the courage of the American citizens, the people who lived and
worked in New York. It in large part was
also through the efforts of the Federal
Reserve System and the Federal Reserve
Bank of New York, which told people,
“We’re open, we’re operating,” and told
financial institutions, “We expect you to
keep operating. If you have a problem,
bring it to us and we’ll solve it.”

Q. The Fed as an institution is difficult for many people to understand. Its proceedings aren’t open
to the public. What is the purpose
of this opacity, and what challenges does it pose?
The secrecy that we used to think
made our policies effective created
uncertainty in the long run. And businesses have to react and prepare for
that uncertainty. We’ve learned that by
reducing uncertainty in policy, we’ll get
less volatility, less inflation and better
outcomes.
But we still need to keep some
things secret. The decisions of the FOMC
[the interest rate-setting Federal Open
Market Committee] can have a big effect
on markets and can redistribute wealth.
Financial institutions place big bets—
we’re talking billion-dollar bets—on the
decisions of financial leaders. There’s a
huge incentive for institutions to get this
information. There’s a potential for them
to earn vast profits; these will be profits
that they will be earning at the expense of
other financiers. That would really distort
the financial system. When we release
financial information, we want to do it
in a way that creates a level playing field
and has the most salient effect on the
financial system.
The other side of the Fed is financial
regulation and bank supervision. Here
opacity is important because we gather
information from firms about their
financial positions, about their financial strategies and about the state of the
economy. This is private information that
these firms depend on. To ensure that
we get the most accurate information,
we have to provide privacy. We have to
guarantee that they will not suffer some
kind of loss or disadvantage because they
provide us with information.

Q. Economist Allan Meltzer’s voluminous A History of the Federal
Reserve is regarded as the definitive work on Fed history. Where do
you pick up the story and how do
you bring something new?
The Federal Reserve Board of Governors and the System as a whole have
over the last 20 years done a great job of
opening the archival materials from the

Southwest Economy • Federal Reserve Bank of Dallas • First Quarter 2014

organization like the Fed needs a historian
}“An
because it responds to events that are infrequent
but very severe. The job is to retain the information
you need for people to study them.”

FOMC to researchers. If the goal of the
System is just to help Allan Meltzer and
other people to do this, then we don’t
need an economic historian.
You don’t have nearly the same
amount of historical study of the Federal
Reserve Bank of Dallas or the Federal
Reserve Bank of San Francisco. This is
largely because these Banks have not
opened their archives to scholars. The
reason that you appoint a historian is
that there are important histories that
haven’t been written, and there are
important issues that you want to study
more, and the current system isn’t allowing those histories to be written.

Q. What are the main contributions of the Federal Reserve Bank
of Dallas to the Fed’s story? What
has distinguished the Dallas Fed
from its peers over the last 100
years?
During the 1920s and 30s, there was
a lending boom here and in the district to
the north, Kansas City, that was focused
on agricultural credit. It ended in the
1930s in the Dust Bowl. It seems more
relevant today because we did a repeat of
this pattern in the 1990s and the 2000s.
Around 1915, the U.S. government
began to sponsor quasi-government
entities—the Federal Land Bank and
the Federal Intermediate Credit Banks.
These organizations issued bonds on
eastern financial markets to raise funds
to make mortgage loans. The mortgage
loans were bundled into packages of
securities. Mortgage-backed security
lending was really big in this district in
the 1920s and up until the 1930s, when
there was a big collapse.

The Dallas Federal Reserve District
also has a unique history in the 1970s
and the 1980s. Due to high inflation
and interest rate caps imposed by the
Federal Reserve Board, a lot of depositors
pulled out their money from local banks
and sought higher returns elsewhere.
Some of this money sloshed up to New
England and then, we know, some of it
sloshed back down to the Dallas Federal
Reserve District. There were big booms
here in lending that ended in a big mess
in the 1980s. That’s really an important
issue; we probably should do more shortrun studies to understand exactly what
happened and how the Fed’s policies
contributed to the problem and how they
ameliorated it.

Q. From the perspective of a historian and economist, how do you
think your successors will evaluate policymakers’ response to the
recent financial crisis?
I’m spending a lot of time reading
recent accounts of the financial crisis
written by the leading practitioners,
critics and scholars. I’m looking at the
questions that they are posing and making sure that the System is going to retain
the information so that scholars and
reporters can answer these questions
in the future. Alan Blinder in his book
After the Music Stopped said there is a key
historical question about the financial
crisis that historians and economists
will argue about for decades: Should the
Federal Reserve Board have intervened
to prevent Lehman Brothers from failing?
It’s not clear how you would answer
this question. We see that after Lehman
Brothers failed, there was a cascade that
swept through its counterparties. There
was this massive panic in financial markets. If we had bailed out Lehman Brothers, some other firm could have failed.
Or the trigger for the cascade might have
been put off a week. It might have been
put off a month.

You have to think about all these
possible counterfactual scenarios. Decisions were made in a very short period
of time in a big pressure cooker and they
are all related in very complicated ways.

Q. You’ve written extensively
about the Great Depression. How
much of the Fed as an institution
reflects that period?
The structure and the powers of the
Federal Reserve today strongly reflect
amendments to the Federal Reserve
Act in the 1930s. You couldn’t have
had quantitative easing policies without the changes to the structure of the
System in the 1930s. You couldn’t have
had the emergency response in 2008,
you couldn’t have had a rescue of Bear
Stearns, you couldn’t have had a rescue
of AIG [insurer American International
Group] or of Reserve Primary [a money
market fund] if you didn’t have the reform acts in the 1930s.
Congress gave similar powers to the
Federal Reserve that it gives to officers in
the armed forces. If you’re a general or an
admiral, you’re under civilian control—
you have to follow the rules that the civilian government sets. When we send you
out to battle, you’re in charge—you have
a mission, things are going to happen
and your job is to succeed.
When I look at the actions that the
Federal Reserve took during the financial
crisis, the people who looked really good
were decision-makers in the Federal
Reserve, the Treasury and other central
banks around the world. But I think there
was also a lot foresight by the [Depression-era] Congress, which understood
how to craft a decision-making structure
for the Federal Reserve that could handle
crises.
Hear excerpts of the interview at:
www.dallasfed.org/research/swe/2014
/swe1401c.cfm.

Southwest Economy • Federal Reserve Bank of Dallas • First Quarter 2014

Texas Leads Nation in Creation
of Jobs at All Pay Levels
By Melissa LoPalo and Pia M. Orrenius

}

Even while the state is
adding a disproportionate
share of jobs, its record
of robust employment
growth has been clouded
by questions concerning
the quality of the new
positions.

Table

exas was among the first states
to emerge from the 2007–09
Great Recession, surpassing its
prerecession employment peak
in late 2011. Meanwhile, the nation as a
whole has yet to regain the jobs lost in
the recession—as of December 2013, the
U.S. remained over a million jobs short of
its prerecession high.
Even while the state is adding a
disproportionate share of jobs, its record
of robust employment growth has been
clouded by questions concerning the
quality of the new positions. Echoing
what appears to be a common perception, one Texas state representative
quipped in 2011, “If you want a bad job,
go to Texas.”1
There are several reasons casual observers conclude that Texas creates “bad
jobs.” Average wages have historically
been lower in Texas, along with median
household income. The state also has a
large share of workers earning the federal
minimum wage. According to the Bureau
of Labor Statistics, 7.5 percent of hourly
workers in Texas in 2012 were paid at
or below the federal minimum wage,
compared with 4.9 percent nationally.2

Employment Change by Wage Group Since 2000
Change in employment
(thousands of jobs)

Wage quartile
Lowest

Hourly wages

Texas

U.S. minus Texas

Less than 11.42

627.9

2,329.6

Lower-middle

11.42–16.92

298.2

–731.4

Upper-middle

16.93–26.04

512.7

11.4

Highest

Above 26.04

618.3

3,398.5

2,057.1

5,008.2

24.9

4.7

Total
Total percent change
NOTE: Wages are in real December 2013 dollars.

SOURCE: Authors’ tabulations of Current Population Survey Merged Outgoing Rotation Groups 2000, 2013.

Texas’ share was second only to Idaho’s,
at 7.7 percent.
Furthermore, Texas has the ninth
highest Gini coefficient—a common
measure of income inequality3—and the
highest share of residents without health
insurance in the U.S.4
Given this mixed record on wages
and income, it might seem surprising
that household survey data indicate
Texas creates more high-wage than lowwage jobs and that average wages have
risen slightly in real (inflation-adjusted)
terms since 2000. The nation’s record
is markedly less positive and points to
labor market polarization, described by
labor economists as a long-run trend that
erodes job opportunities for those in the
middle of the wage distribution.

Job Growth by Wage Group
There are many ways to measure
the quality of a job. Wage rate is one way;
fringe benefits and hours worked are
two others. Jobs can also be evaluated on
working conditions and opportunities for
advancement. This analysis focuses on
hourly wages (for salaried jobs, weekly
earnings divided by hours worked) and
uses the Bureau of Labor Statistics’ Current Population Survey (CPS) data to
measure hourly wages among workers
age 16 and older.5 Wages were ranked
in ascending order, and the resulting
U.S. wage distribution was divided into
quartiles for the base year (2000) (Table
1). Employment changes between 2000
and 2013 were then calculated for each
quartile.
Texas experienced stronger job
growth than the rest of the nation in all
four wage quartiles from 2000 to 2013,
even in the middle two wage quartiles,
where growth in the rest of the nation
was negative and zero, respectively
(Chart 1).6 In Texas, the two upper wage
quartiles grew at 28 and 36 percent,

Southwest Economy • Federal Reserve Bank of Dallas • First Quarter 2014

Chart

Texas Creates Jobs Across the Wage Distribution
(Job growth by wage quartile, 2000–13)

Percent change in employment

Texas
U.S. minus Texas

35
30
25

data show Texas has
}The
experienced far greater

20
15
10
5
0
–5

Lowest wage
quartile

Lower-middle
wage quartile

Upper-middle
wage quartile

Highest wage
quartile

growth of ‘good’ jobs
than the rest of the nation
has since 2000.

SOURCE: Current Population Survey Merged Outgoing Rotation Groups 2000, 2013.

respectively, over the 13-year period,
corresponding to average annual rates of
2.1 and 2.7 percent. The 13-year figures
for the rest of the nation were 0 and
13 percent, corresponding to average
annual rates of 0 and 1 percent. In sum,
the data show Texas has experienced far
greater growth of “good” jobs than the
rest of the nation has since 2000.
Texas has also created more “good”
than “bad” jobs. Jobs in the top half of
the wage distribution experienced disproportionate growth (Chart 2). The two
upper wage quartiles were responsible
for 55 percent of net new jobs. A similar

Chart

pie chart cannot be made for the rest of
the U.S., which lost jobs in the lowermiddle quartile over the period. Between
2000 and 2013, Texas household survey
employment overall grew 24.9 percent,
while employment in the rest of the U.S.
expanded just 4.7 percent.7

Labor Market Polarization
Job growth trends in Texas break
with the national pattern. Texas has succeeded in producing broad-based job
growth in the context of job and wage
polarization nationally. According to the
Massachusetts Institute of Technology’s

Upper Wage Quartiles Account for Over Half
of New Texas Jobs

Highest wage quartile

Upper-middle wage quartile

Lowest wage quartile

Lower-middle wage quartile

SOURCE: Current Population Survey Merged Outgoing Rotation Groups 2000, 2013.

Southwest Economy • Federal Reserve Bank of Dallas • First Quarter 2014

David Autor and other leading labor
economists, the American middle class
has been “hollowed out” over the past
three decades because job growth is increasingly concentrated at the high and
low ends of the wage distribution.8
The prospects of those at the upper
end of the skill distribution continue to
improve, while growth in menial, lowpaying positions has remained steady.
Meanwhile, middle-income job opportunities are shrinking. Explanations for
this phenomenon include globalization
and technological change, leading to the
outsourcing and automating of routine,
middle-income jobs9 as well as a deceleration in the supply of educated workers,
driving an increase in the wage premium
for high-skilled workers.10 Studies suggest
that the situation is not limited to the
U.S., but is also present in Europe and
other advanced countries.11

Worker Characteristics
In Texas, as in the rest of the U.S.,
workers on the lower end of the wage
distribution have much different demographic characteristics than their highly
paid counterparts. Those in the lowerincome quartiles are much younger,
especially in the lowest wage quartile,
where nearly a third of workers in Texas
were under the age of 26 in 2013 (Chart
3). This suggests that many workers in
the lowest wage quartile in Texas as

Chart

well as the rest of the nation are just getting their start in the labor market and
may subsequently move up as they gain
experience.
Low-wage workers in Texas also
have low educational attainment, though
many of them may not yet have completed their educations, given their age.
However, workers in the lowest wage
quartile in the U.S., excluding Texas, are
more educated on average than their
Texan peers; 28 percent of Texas workers in the lowest wage quartile lacked
a high school diploma or GED in 2013,
compared with 19 percent in the rest of
the U.S.
In contrast, Texans in the highest
wage quartile have more similar educational attainment to their counterparts in
the rest of the nation; over 60 percent of
workers at the top of the wage distribution hold a bachelor’s or postgraduate
degree.
Those in the highest wage quartile
in Texas and the rest of the nation are
concentrated in jobs requiring extensive
training, such as management and legal
occupations, while workers in the lowest
wage quartile primarily occupy positions in labor-intensive jobs such as food
preparation.
Workers in the middle two quartiles
in the state and nationally are concentrated in office, administrative support and sales jobs. However, in Texas,

Low-Wage Texas Workers Much Younger Than
High-Wage Counterparts

Age

>75
71–75
66–70
61–65
56–60
51–55
46–50
41–45
36–40
31-35
26–30
21–25
16–20

Highest wage quartile

Lowest wage quartile

Finding the ‘Good Jobs’
Most Texas economic sectors
contributed to the expanding numbers
of “good jobs” since 2000. Employment
growth in sectors paying above the median wage reflects the state’s expanding
population and need for more schools
and hospitals, the recent strength of the
energy sector and the diversification of
the Texas economy.
Education and health services contributed 42 percent of net new high-wage
jobs due to growing demand for teachers, doctors, nurses and other positions
requiring a college degree (Chart 4).
The mining industry, which in Texas
consists mainly of oil and gas extraction
and support activities, also contributed
strongly (15 percent) to expansion in the
top half of the wage distribution between
2000 and 2013. Payroll employment in oil
and gas extraction and support activities
for mining in Texas more than doubled
between 2000 and 2013, according to
the Bureau of Labor Statistics’ Current
Employment Statistics. Interestingly, the
oil and gas sector pays above-average
wages although many oil and gas jobs do
not require a college degree.
The category of finance, insurance
and real estate together with the professional and business services sector are
ranked third and fourth in contributing
to high-wage job growth in Texas since
2000. They include jobs in high-paying
service sector occupations such as consulting, banking, accounting, legal and
engineering. They serve the booming
construction and housing industries and
support energy activity and expanding
health and high-tech industries.

Lessons Learned

Percent

NOTE: Quartiles based on 2000 U.S. wage distribution.
SOURCE: Current Population Survey Merged Outgoing Rotation Groups 2013.

they are much more likely to work in
construction and oil and gas extraction
than their counterparts in the rest of the
nation, indicative of Texas’ expansive
energy industry.

Critics of the Texas economic model
often contend that Texas’ exceptional job
growth has not produced a high standard
of living for its residents due to the low
quality of the new positions. However,
Texas’ job growth since 2000 has been
much more proportional than in the rest

Southwest Economy • Federal Reserve Bank of Dallas • First Quarter 2014

Chart

Payroll employment grew 21.9 percent in Texas and 4.8
percent in the U.S. from December 1999 to December
2013.
8
See “The Polarization of the U.S. Labor Market,” by
David H. Autor, Lawrence F. Katz and Melissa S. Kearney,
American Economic Review, vol. 96, no. 2, 2006, pp.
189–94.
9
See “The Polarization of Job Opportunities in the
U.S. Labor Market: Implications for Employment and
Earnings,” by David Autor, Brookings Institution’s the
Hamilton Project and Center for American Progress,
April 2010.
10
See The Race Between Education and Technology, by
Claudia Goldin and Lawrence F. Katz, Cambridge, Mass.:
Belknap Press of Harvard University Press, 2008.
11
See “Job Polarization in Europe,” by Maarten Goos,
Alan Manning and Anna Salomons, American Economic
Review, vol. 99, no. 2, 2009, pp. 58–63.
12
See “Gone to Texas: Immigration and the
Transformation of the Texas Economy,” by Pia Orrenius,
Madeline Zavodny and Melissa LoPalo, Federal Reserve
Bank of Dallas, November 2013.
7

High-Wage Texas Employment Growth Is Broad-Based
(Contribution to job growth above the median wage by sector, 2000–13)

41.6

Education and health services
14.7

Energy and mining

13.3

Finance, insurance, real estate

12.3

Professional and business services
Trade, transportation, utilities

Construction

6.8

Government

5.6
4.5

Other services
Leisure and hospitality

3.9
.2

Agriculture, fishing, forestry

–4.8

Information services

–7.1

Manufacturing
–10

10
20
30
Percent of total job growth

NOTE: Quartiles based on 2000 U.S. wage distribution.
SOURCE: Current Population Survey Merged Outgoing Rotation Groups 2000, 2013.

of the nation, where net new jobs have
been concentrated at the bottom and top
of the wage distribution and the middle
has shrunk further.
Texas still has a high share of minimum wage jobs, partly due to the state’s
relatively low minimum wage (set equal
to the federal minimum wage). A low
minimum wage and plenty of low-skilled
workers ensure that Texas will have a
high share of minimum wage jobs. On
the other hand, a relatively low cost of
living in Texas ensures that workers’
earnings here will go further than in
other large states.
Texas has produced hundreds of
thousands of well-paying jobs across
most industries since 2000, making Texas
the top destination for domestic migrants
since 2006.12 That said, the same broad
trends—globalization, technological
change, a slowdown in educational attainment—that are causing the national
labor market to polarize are also present
in Texas. Until now, a combination of
other factors has prevailed, and the state
has outperformed the rest of the nation
in every category of employment growth.
To the extent that these “other factors” include some growth engines that
may sputter in the future, however, the
state would do well to make the changes
now—such as investing in higher education—that will bolster economic opportunity down the road.

LoPalo is a research analyst and Orrenius is a vice president and senior
economist in the Research Department
at the Federal Reserve Bank of Dallas.

Notes
The authors thank Madeline Zavodny, professor at Agnes
Scott College, for her comments on an earlier draft of
this article.
1
Rep. Garnet Coleman in an interview with the Huffington
Post. See “Rick Perry’s ‘Texas Miracle’ Includes Crowded
Homeless Shelters, Low-Wage Jobs, Worker Deaths,” by
Jason Cherkis, Huffington Post, Aug. 8, 2011.
2
See “Characteristics of Minimum Wage Workers: 2012,”
U.S. Bureau of Labor Statistics, Feb. 26, 2013.
3
See “Pulling Apart: A State-by-State Analysis of Income
Trends,” by Jared Bernstein, Elizabeth McNichol and
Karen Lyons, Center on Budget and Policy Priorities,
Washington, D.C., January 2006.
4
See “Income, Poverty, and Health Insurance Coverage
in the United States: 2012,” by Carmen DeNavas-Walt,
Bernadette D. Proctor and Jessica C. Smith, U.S.
Census Bureau, Current Population Reports, P60-245,
September 2013.
5
We use the monthly outgoing rotation group extracts
from the National Bureau of Economic Research. The
Bureau of Labor Statistics (BLS) interviews 50,000–
60,000 households monthly, and every household
is interviewed for four months, dropped for eight
months, and then interviewed for another four months.
The monthly outgoing rotation group data capture
households leaving the survey after the first and second
four months of interviews.
6
The results are robust to using the 2013 distribution
to create cutoffs and to eliminating outliers in the wage
distribution. The calculations are conditional on being
employed with positive wages and exclude the selfemployed.

Southwest Economy • Federal Reserve Bank of Dallas • First Quarter 2014

NOTEWORTHY
ENERGY: Finding New Estimators of Oil and Gas Production

or decades, rig counts have provided a good measure of domestic oil and gas production. However,
new drilling and production technologies—especially horizontal drilling and hydraulic fracturing—have weakened this traditional relationship and generated the need for different ways to
estimate production levels.
Recent growth in domestic oil and natural gas production has been driven mainly by greater drilling
efficiency and new well productivity, not by rig count increases, according to reports from the Energy
Information Administration (EIA).
Estimates of total U.S. oil production averaged 7.9 million barrels per day in fourth quarter 2013, up
more than 17 percent over fourth quarter 2012, EIA data show. During that same period, the U.S. rig count
fell almost 3 percent, according to Baker Hughes, a Houston-based oilfield services company.
Drilling efficiency—the number of wells drilled per rig—and well productivity can be combined with
rig counts to better estimate production levels. The ratio of wells to rigs explains how production can increase when the number of rigs in use falls. Wells drilled per rig in the U.S. averaged 5.34 in fourth quarter
2013, up from 4.92 in fourth quarter 2012, Baker Hughes said.
—Amy Jordan

HEALTH INSURANCE: Texas Leads States in Medical Coverage Gap

segment of the poor population in Texas is missing out on health insurance assistance provided
for under terms of the Affordable Care Act (ACA). Texas is one of 25 states that chose not to expand
Medicaid coverage in 2014 to everyone earning less than 138 percent of the federal poverty level
(FPL), or $31,809 for a family of four.
This decision creates a coverage gap for individuals who are in poverty but earn too much to qualify
for Medicaid, the existing health program for the very poor. More Texans fall into this gap than residents
of any other state—over 1 million adults out of 4.8 million nationwide, according to a Kaiser Family Foundation report. Texas’ outsized share of the coverage gap is largely due to the state’s use of one of the country’s lowest Medicaid eligibility thresholds—19 percent of the FPL—and its above-average poverty rate.
Bridging the gap would require raising Medicaid recipient numbers from 4.6 million (in 2011) to 5.6
million, according to the Texas Health and Human Services Commission. Texas would pay 7 percent of
the additional cost through 2022, with the federal government picking up the rest. State officials question
the reliability of federal funding for a program they view as an intrusion into local governance. Without
the expansion, 91 percent of Texas adults in poverty will remain uninsured—the highest rate in the U.S.
—Christina English

FEDERAL TAXES: Texans Lose Popular Deduction for Sales Taxes

any Texans face a bigger federal tax bill now that Congress has failed to renew a temporary tax break
that allowed the deduction of state and local sales taxes. Unless lawmakers act to retroactively restore
the break, filing in 2015 could be more expensive for those who itemize deductions.
The law allowed taxpayers to deduct either state income taxes—which Texas and six other states
don’t impose—or sales taxes. Deductibility for income, real estate and personal property taxes remains.
Texas ranked third among the states in the proportion of tax filers claiming the sales tax deduction, at
20.2 percent in 2011, according to Pew Charitable Trusts. Washington at 28.8 percent was No. 1, followed
by Nevada at 23 percent.
The deduction is especially useful for people making large purchases, and the prospect that it
wouldn’t be renewed prompted a spate of new car purchases in Texas at year-end. Congress originally
abolished the deduction in 1986. It was brought back in 2004 and extended annually until 2013.
Deductions like the ones for sales taxes, homeownership and charitable giving are collectively
known as “tax expenditures”—items reducing monies that the federal government would otherwise collect. They totaled $1.1 trillion in fiscal 2013, according to Pew.
—Michael Weiss

Southwest Economy • Federal Reserve Bank of Dallas • First Quarter 2014

SPOTLIGHT

Health Coverage Misses Many in DFW, Texas
By Jason Saving and Michael Weiss

he Dallas–Fort Worth metro
area has a higher median income than Texas and a slightly
higher median income than
the U.S. as a whole (see chart). It recently
ranked among the nation’s most attractive areas for job seekers. It even features
prominently on lists of upper-income
amenities such as shopping malls, spas
and cosmetic-surgery expenditures per
capita. Yet both Dallas and Tarrant counties feature uninsured rates that would
rank among the top 10 states in the
nation, with Dallas County’s 30.5 percent
nearly double the national average.
This situation does not stem from a
lack of large corporations—which typically offer health insurance plans as part
of their benefits packages—in the region.
Were the metropolitan area a state, its 18
Fortune 500 listed companies would rank
it 10th in the nation, behind leaders California and New York but ahead of Connecticut and Florida. Put another way,
there were 54 locally based publicly held
companies with more than $1 billion in
annual revenue, according to a May 2013
Dallas Morning News compilation.
Nor does it stem from subpar
growth in DFW or Texas. State employment has risen at the second-fastest rate
in the nation since the recession ended
in mid-2009, moving past prerecession
job totals in 2011 and attracting people
from the outside in search of employment. New car registrations, providing
one measure of those coming to Texas,
rose 9 percent from 2006 to 2011, National Highway Administration data show.
The greater DFW metropolitan area
population grew 9 percent to 6.6 million
residents from 2006 to 2011, according to
Bureau of Labor Statistics estimates.
A key factor that does affect rates of
uninsured is the 18 percent foreign-born
share of the DFW population, who typically have more-limited access to private
insurance and government support.
Although many foreign-born residents
are high-skilled, the foreign born disproportionately work at low-wage jobs

where health insurance is not provided.
Moreover, the Affordable Care Act (ACA)
excludes some of the foreign born,
specifically undocumented immigrants,
from the subsidized coverage available to
other residents, almost guaranteeing that
areas such as DFW will have high rates of
uninsured under ACA rules.
High rates of small-business formation in the region may also play a role. A
National Bureau of Economic Research
study found that 55 percent of firms
nationwide with fewer than 10 employees don’t offer health insurance.1 And
based on data from software manager
Intuit, Texas small-business employment
growth has exceeded overall growth in
the region since October 2009, which
may have the side effect of perpetuating
high uninsured rates, though the ACA’s
exchanges may eventually reduce this
phenomenon.
State decisions figure in DFW’s
high uninsured rate, most significantly
through the Medicaid program. While
Medicaid is jointly funded by states and
the federal government, states have
historically had the power to choose the
income threshold below which Medicaid
benefits will be received. Texas’ chosen
threshold of 19 percent of the federal poverty line places it among the bottom five
states, which means poor people who

would be covered by Medicaid in other
states go without insurance in Texas.
Medicaid would have been extended to those at or below 138 percent of the
federal poverty line under the Affordable
Care Act, but Texas has elected not to
participate in the expansion. (See Noteworthy, page 14.) Another issue that affects both DFW and Texas is the future of
uncompensated (charity) care in Texas.
After all, residents without insurance
typically have access to medical care at
public hospitals.
The ACA imposed a cumulative
$18.1 billion reduction in “disproportionate share hospital” subsidies
(uncompensated care) across the U.S.
through 2020 under the assumption that
a 50-state Medicaid expansion would
lower the overall amount of uncompensated care in the U.S. Because the original
intention was that every state would
participate in the expansion, no provision was made to restore full funding
to providers whose states opt out, likely
putting greater fiscal strain on hospitals
that provide a disproportionate amount
of uncompensated care.
Note
See “Covering the Uninsured in the U.S.,” by Jonathan
Gruber, National Bureau of Economic Research, NBER
Working Paper no. 13758, January 2008.

Median Household Income in Dallas–Fort Worth Exceeds That in Nation
Real 2012 dollars (thousands)

62
60

Dallas-Fort Worth

58
56
U.S.

54
52
50
2005

2006

2007

2008

2009

2010

2011

2012

SOURCE: American Community Survey.

Southwest Economy • Federal Reserve Bank of Dallas • First Quarter 2014

Federal Reserve Bank of Dallas
P.O. Box 655906
Dallas, TX 75265-5906

PRSRT STD
U.S. POSTAGE

PAID

DALLAS, TEXAS
PERMIT NO. 151

SNAPSHOT Two Conferences to Mark Dallas Fed Centennial

s the Federal Reserve Bank of Dallas commemorates
its centennial, its Research Department is planning a
pair of conferences that will highlight the evolution of
the Federal Reserve and the region’s economy.
“A Historical Perspective on the Federal Reserve System
in a Globalized World,” sponsored by the department’s
Globalization and Monetary Policy Institute, is scheduled for
Sept. 18–19. “100 Years of Economic Growth and Change in
the Eleventh District,” a project of the department’s regional
group, is planned for Nov. 7.
Dallas might have been a mere footnote in Federal
Reserve history if negotiations over the site of the Eleventh
District headquarters had gone differently. Dallas prevailed,
besting New Orleans for the distinction, following establishment of the central bank system under terms of the Federal
Reserve Act of 1913.
Dallas Morning News publisher George B. Dealey and
Dallas Clearinghouse representative J. Howard Ardrey led
a spirited campaign to influence the secretaries of Treasury
and Agriculture along with the comptroller of the currency,

DALLASFED
2014

Now Hiring

who were to make the location decision. Dealey received word in April
1914 that Dallas had won out, owing
to the growth of its banking business, which had more than doubled
during the prior decade while New
Orleans’ had remained stable.
Dallas Fed directors met for the
first time on Oct. 16, 1914, at City
National Bank of Dallas. In 1921, the
Dallas Fed moved into what would
become its home for more than 70
years at 400 S. Akard St. It relocated
to its current headquarters at 2200
Federal Reserve Bank of Dallas, 400 S. Akard St.
N. Pearl St. in 1992.
The Eleventh District covers all of Texas, northwestern Louisiana and southeastern New Mexico. After its unsuccessful attempt
to become the headquarters, New Orleans became a branch of the
Federal Reserve Bank of Atlanta.

—Michael Weiss

Southwest Economy

is published quarterly by the Federal Reserve Bank of
Dallas. The views expressed are those of the authors and
should not be attributed to the Federal Reserve Bank of
Dallas or the Federal Reserve System.
Articles may be reprinted on the condition that the
source is credited and a copy is provided to the Research
Department of the Federal Reserve Bank of Dallas.
Southwest Economy is available on the Dallas Fed
website, www.dallasfed.org.

Federal Reserve Bank of Dallas
2200 N. Pearl St., Dallas, TX 75201

Mine Yücel, Senior Vice President and Director of Research
Pia Orrenius, Executive Editor
Michael Weiss, Editor
Jennifer Afflerbach, Associate Editor
Kathy Thacker, Associate Editor
Ellah Piña, Graphic Designer

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