DALLAS (KRLD) - The Federal Reserve Bank of Dallas says an increase in COVID-19 cases and hospitalizations may slow the state's economic recovery, but Texas has started adding jobs.
The Federal Reserve Bank says Texas jobs grew 3.6% from July through September, but nationally, the growth rate was 11.9% in the second quarter. Robert Kaplan, the bank's president and chief executive officer, says oil and gas may be holding back Texas' recovery.
"It's no secret we've lost a lot of jobs in this sector, " Kaplan says.
Kaplan does say, though, that he expects oil and gas to recover next year. He says a Joe Biden administration may lead to changes in the energy sector, but producers had already been looking at how to shift to more revenue from renewable energy.
"The oil industry, for example on environmental issues, is already in the middle of that transition," he says. "There will be millions of new jobs in the United States related to sustainable energy, and Texas plays a huge role in wind and solar."
The rig count in Texas has increased since September.
Kaplan says the increase in COVID-19 cases and hospitalizations may have led to slower growth late in the third quarter. The Dallas Fed says jobs expanded 8% in September but just 1% in October.
The federal reserve bank says manufacturing and retail services had "robust" growth in September, but that growth slowed in October for services. Manufacturing continued to grow.
The unemployment rate in Texas was 8.3% in September, the most recent data available, down from 13.5% in April, but up from 7% in August. Kaplan says another round of fiscal relief or assistance for small businesses may be necessary, saying consumer spending has stayed "resilient" because of previous action, but this increase in cases may lead to another round of closures.
"Particularly for groups who have lost their jobs, the savings from the initial round of fiscal relief is starting to run out," he says. Kaplan says with unemployment still elevated, many people are still making decisions based on that fiscal relief.
But Kaplan also says Texas' economy has been growing more diverse, and with an expected recovery in oil and gas, he expects Texas to return to performing better than the national economy. The Dallas Federal Reserve predicts the state's economy will grow 3.5% in 2021.
