Consumers in Texas Hit by “Negative Ripple Effects”

Greetings,

Note: What does this represent? It represents the fact that every economic barometer known is pointing towards decay and decline of the American economy. Event by event and sign by sign we see the handwriting on the wall, and it’s written in poverty, bloodshed, and disillusionment.

There is a new reality. This new reality is not like the old one. This new reality ushering in the fall of empire and the wealth destruction of the once wealthiest nation in the last 6,000 years.

Allah manifests the fall of America. He desires to make America fall as a warning to her brothers in Europe. He is showing them what will come to them if they continue down the dead end road lead by America.

Consumers in Texas Hit by “Negative Ripple Effects”

by Wolf Richter

This is no longer a blip, but a new reality.

It is by now an indisputable fact, driven home by just about everyone, including the Dallas Fed, that the Texas economy is big, diversified, and “highly resilient,” and that the collapse of the oil boom, while it may cause some “negative ripple effects,” won’t dent the overall economy.

Dallas Fed President Robert Kaplan himself had pointed that out. The energy sector accounted for only 2% of the state’s employment – albeit well-paid employment including many specialized engineers – and 10% of the state’s GDP, “a good deal lower than in the 1980s, when that oil bust pushed the Texas economy into a major recession,” he said.

So, well, yes, job growth came to a crawl as the manufacturing and energy sectors shed jobs; the unemployment rate rose from 4.4% at the beginning of 2015 to 4.6% at the end of 2015. Kaplan sees “a further rise” of the unemployment rate in 2016, with risks to his forecast being “to the downside if oil stays at or below $30 per barrel for an extended period.”

But the service sector “showed steady, moderate growth,” he said:

This recent economic performance has been bolstered by the diversified nature of the Texas economy. While Houston’s growth has been brought to a halt by the energy downturn, Austin, Dallas, and San Antonio have shown strong growth and continue to attract people and firms from around the country and the world.

And he expects “this resiliency and underlying strength to continue as the negative impacts of energy begin to dissipate in the years ahead.”

But retail sales in Texas paint a different scenario.

Since their Financial-Crisis low, retails sales in Texas have been booming, in line with the oil boom at the time. Sales tax collections, reported by the Texas Comptroller of Public Accounts, soared 46% from the first half of 2010 to the first half of 2015! But then it all came unglued.

Sales tax collections don’t capture every retail sale. Basic food products like flour, sugar, bread, or vegetables are exempt. Motor vehicle sales and rentals are reported separately. Since the data is not seasonally adjusted, it can only be compared year-over-year. Sales tax collections lag sales by one month, with collections reported for February representing sales that occurred in January. And they’re raw data, not based on estimates, surveys, or opinions, but on dollars that people actually spent, and so they give an unvarnished glimpse at reality.

The retail sales boom in Texas first tripped up in June and August last year, when sales tax collections declined year-over-year for the first time since March 2010. Then in October, collections dropped 5.4%; in November, 3.3%; in December 1.0%. In January – for December’s crucial holiday sales – collections fell 3.9%. And now the Comptroller’s office released data of sales tax collections in February: they plunged 6.8%!…..More Here

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