Texas A&M’s Private Enterprise Research Center released the July 2022 edition Economic Indicators report Thursday, and researches say the Bryan-College Station economy is on the uptick with low unemployment and an increase in housing prices, despite inflation and the effects of the COVID-19 pandemic.
“Overall, the local economy is doing fine,” Andy Rettenmaier, PERC’s executive associate director, said. “We are keeping a close eye on real or inflation adjusted taxable sales, and the inflation adjusted wages, just given how rapidly prices are rising. We know that at the individual level, real wages have declined during this period of inflation. When we think about all workers in the economy, they have been able to stay up with inflation. But individually they have declined, so we are going to keep an eye on those two as we go forward.”
After diving into the current state of the economy based on monthly numbers through May, Rettenmaier said the Business-Cycle Index increased 0.2% from April to May; the local unemployment rate remained unchanged at 3.3% in May; local nonfarm employment in May decreased by 0.3% from April but was 1.87% higher than its pre-pandemic high in February 2020; local real (inflation-adjusted) taxable sales increased by 0.3% from April to May and were 7.2% higher than the same month in 2021; and the local housing prices have risen substantially since the beginning of 2021, similar to the statewide pace.
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“The index went up 0.2% from April to May and that was a consequence of the local unemployment rate remaining unchanged. It was 3.3% in April and it was 3.3% in May, so that was a neutral effect,” he said. “But the local non-farm employment was just slightly lower by 0.3%. However it is about 1.9% higher than it was pre-pandemic, so it has recovered almost 2%, since the pre-pandemic high that we mark as February 2020.”
Taxable sales increased 0.3% from April to May and are 7.2% higher than back at the same month in 2021, and 8% higher than in 2020, which is PERC’s benchmark of where the economy was pre-pandemic, Rettenmaier said.
“For a comparison of where our employment rate is relative to the other metropolitan areas in Texas, our local unemployment rate of 3.3% is the third lowest. This has been consistent throughout the pre-pandemic and post-pandemic,” he said. “Austin has just been a booming economy and their unemployment rate is 2.9% … ours is lower than Dallas, Fort-Worth and San Antonio. We are doing good in terms of our local unemployment rate.”
As far as non-farm employment of about 127,000, B-CS is about 2% higher than February 2020 and taxable sales are 8.1% higher than the pre-pandemic peak, which shows the economy has improved.
“Our unemployment rate has not gotten as low as it was in pre-pandemic. In terms of unemployment rate we still have a ways to go, but in terms of real-taxable sales we are above,” Rettenmaier said.
Jim Gaines, a research economist at the Texas Real Estate Research Center at Texas A&M, said while he hasn’t gone through the PERC report as of Friday afternoon, his inclination of what he knows about the B-CS is that “we are still doing fundamentally very well.”
“Jobs are being created and the unemployment rate is relatively low,” he said. “The A&M University is also the mainstay of the local economy, it is the main driver, and the university is still sound and still doing well and adding faculty and students … so you have that fundamental base.
“We are still experiencing here in Bryan-College Station some of the stuff that is going on nationally, mortgage interest rates are up and home prices are up so that is affecting the overall housing market. The home market is cooling off a little bit and that is a major part of the economy.”
Regarding the housing market, Rettenmaier said their research found a rapid rise in housing prices since January 2021.
“When you look at the housing prices at the beginning of 2021, and compare those to the housing prices at the first quarter of this year, they have gone up 19%,” he said. “We know that we have also had high inflation during this period, but even after adjusting for high inflation, real home prices based on [our findings] have gone up 10% from the first quarter of 2021, to the first quarter of 2022. Inflation adjusted prices have gone up 10%.”
PERC also looked at American Airlines enplanements at Easterwood Airport, compared to total travelers through TSA checkpoints. Rettenmaier said they limited their findings to American Airlines given it is the only airline currently serving Easterwood.
“We saw that travelers that leave College Station through the Easterwood Airport for American Airlines … in June we had 4,689 folks go through the airport on their way to another destination,” he said. “Nationally the TSA traveler points were 68 million travelers for the month of June, and the series move together.”
Locally on American Airlines, air travel is up 7% in June 2022 relative to June 2019, he said.
“Nationally air travel was down 11% compared to June 2019,” he said. “Some of this might be more people are flying on American than they did in the past because it is the only airline that departs from Easterwood.”
To view the full report, visit brazosvalleyedc.org/data/economic-indicators.