• The nation added 2.4 million jobs through the first 10 months of ’23. That would be a healthy year for employment growth and November and December job data have yet to be reported.
• U.S. gross domestic product (GDP) adjusted for inflation grew at 2.0 percent or better all year. The 5.2 percent growth logged in Q3 was the fifth-best rate of the past 20 years.
• Personal consumption expenditures (PCE), the broadest measure of consumer spending, was up 2.2 percent in October compared to a year ago after adjusting for inflation.
• The nation’s unemployment rate has wiggled all year but never went above 4.0 percent. Any rate under 5.0 percent reflects a tight labor market.

However, indicators for the month of October point to an American economy that has begun to slow. Employers added only 150,000 jobs in the month, well below the 200,000-pre-pandemic monthly average. Sales of new single-family homes slipped 5.6 percent in October. U.S. consumer spending grew only 0.2 percent that month as well. None of these are signs of imminent peril, but they do suggest a return to a slower, steadier state of activity.

If U.S. growth slows, so will Houston’s. Local job gains, home sales, port traffic, and manufacturing activity have slowed in recent months and this trend is likely to continue. Houston will see much slower growth in ’24. How much slower?

The Partnership will answer that question on Thursday, December 7, when it presents its Houston Economic Outlook for 2024 at the Royal Sonesta Hotel.

The program begins with registration and networking at 11 a.m. followed by lunch at noon. A discussion among experts attuned to the region’s growth begins at 12:30. This year’s discussants are:

• Mark Cover, CEO, Southwest Region and Mexico/Central America, Hines
• Hong Ogle, President, Bank of America Houston, Managing Director, SE/SW Division Executive, Private Bank
• Amy Chronis, Vice Chair and Houston Managing Partner, Deloitte

The three will share their insights into real estate, construction, finance, energy, and professional services. Following the discussion, Patrick Jankowski, the Partner-ship’s Chief Economist and Senior Vice President of Re-search, will share the Partnership’s forecast for ’24. All attendees will receive a printed copy of the forecast after the event.

To register for the lunch, panel discussion, and forecast, go to the Events section of the Partnership’s webpage, 1lp7.sanmingzhi.net, or click here. For more information, contact Rebekah Snodgrass at rsnodgrass@sanmingzhi.net. 

Weaker Demand for "Made in Houston"

Metro Houston exports fell 13.8 percent in the first half of ’23, reflecting weaker commodity prices, slower global growth, and firms burning off excess inventories amassed post-pandemic. 

The data comes from the Census Bureau’s origin of movement (OM) series, which tracks the movement of goods based on the metro from which they began their export journey. For example, a valve manufactured in Houston may be trucked to Miami and then loaded onto a plane destined for an oilfield in Latin America. Though the export leaves the U.S. via the Miami International Airport, it began its export journey from Houston. Census records that as a Houston export. 

While shipments have fallen off, Houston remains the nation’s top exporting metro, ahead of New York, Los Angeles, and Chicago. The region has ranked as the nation’s top exporting metro nine out of the past 10 years. When complete data for ’23 is released, Houston will likely maintain that ranking.

Employment Update

Metro Houston added 16,400 jobs in October. That’s slightly above the normal range (12,000 to 14,000) for the month. Year-to-date, the region has created 53,700 jobs. 

The region typically adds 15,000 to 30,000 jobs in November and December, which would have Houston finish the year with 63,000 to 83,000 jobs.  Last December, the Partnership forecast the region would create just under 80,000 jobs if the U.S. avoided a recession. The region is on track to hit the Partnership’s forecast.

Six sectors led job growth in October—health care and social assistance, local public education, professional, scientific, and technical services, retail trade, state public education, and transportation and warehousing. As a group, they added over 19,000 jobs.

Gains were offset by losses in administrative and support services, construction, non-durable goods manufacturing, restaurants and bars, services to buildings and dwellings, and the obscure “management of enterprises” sector.

Total payroll employment in Houston now tops 3,389,500. Since the economy reopened in May ’20, the region has added 557,000 jobs, recovering 155.0 percent of the 359,300 jobs lost early in the pandemic. Employment will likely top 3.4 million by year’s end, only to lose 40,000 to 50,000 jobs in January if the region follows the typical seasonal pattern. By late ’24, employment should surpass 3.4 million again.

To continue reading, download this report.

Note: The geographic area referred to in this publication as “Houston,” "Houston Area” and “Metro Houston” is the nine-county Census designated metropolitan statistical area of Houston-The Woodlands-Sugar Land, TX. The nine counties are: Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery and Waller.