August 2020 Economy At A Glance

By: Taro Chellaram /Wells Fargo Economics & Financial Report/Aug 22, 2020

August 2020 Economy At A Glance

“How much of Houston’s economy is tied to energy?”


“Is Houston less dependent on energy than it was 10, 20 or 30 years ago?”


Energy Defined

Before answering either question, one must first define the industry. Oil and gas has three sectors: upstream, mid-stream, and downstream. Upstream includes exploration, production, and oilfield services. Midstream focuses on the processing, transportation, and storage of crude and natural gas. Downstream involves the refining and processing of oil and natural gas into fuels, chemicals, and plastics. All three sectors are well-represented in Houston.


Energy's Contribution to Houston's GDP

Every December, the Bureau of Economic Analysis (BEA) publishes its estimates of gross domestic product (GDP) for all 384 U.S. metro areas. BEA estimates that oil and gas extraction accounted for $20.5 billion (4.3 percent) of Houston’s GDP in ’18. That’s down from $33.1 billion or 7.7 percent in ’14.


Metro Houston Employment

Metro Houston added 55,000 jobs in June. That’s on top of the 78,200 jobs added in May. Despite the surge, local employment remains 217,700 jobs below its February pre-COVID level. The largest job gains occurred in restaurants and bars, retail and arts, entertainment and recreation. Government, manufacturing and transportation, ware-housing and utilities and energy continued to lose jobs. Of the major sectors, only finance and insurance has returned to its pre-COVID employment level.




Crude Oil

The closing spot price for West Texas Intermediate (WTI), the U.S. benchmark for light, sweet crude, averaged $40.69 per barrel during the last week of July ’20, down 28.0 percent from $56.05 for the same period in ’19. The COVID-19 pandemic continues to reduce global economic activity. However, oil prices rose in July as OPEC and partner countries maintained production cuts and the United States continued to reduce drilling activity.


Home Sales

The Houston area housing market has fully regained its spring losses and returned to pre-COVID sales volumes though the recovery may be short-lived as listings dry up. Houston-area realtors sold 10,975 single-family homes in July ’20, up 23.0 percent from the same month last year and the most ever for a single month in Houston. Year-to-date sales totaled 51,388 single-family homes, up 2.7 percent from the first seven months of ’19.


Natural Gas

The cost of consumer goods and services as measured by the Consumer Price Index for All Urban Consumers (CPI-U) rose 1.0 percent nationwide from July ’19 to July ’20, according to the U.S. Bureau of Labor Statistics. Core inflation (all items less the volatile food and energy categories) increased 1.6 percent since July ’19.


Rig Count

Baker Hughes reports 244 drilling rigs were working in the U.S. during the second week of August ’20. That’s down 691 rigs, or 73.9 percent, from the same week in August last year.

This Week's State Of The Economy - What Is Ahead? - 12 June 2020

Lock downs began to be lifted across most of the country by the end of May and the total amount of daily new coronavirus cases has been trending lower. But the flattening case count has not been consistent across the country.

This Week's State Of The Economy - What Is Ahead? - 27 March 2020

The U.S. surpassed Italy and China with the most confirmed cases of COVID-19. Europe is still the center of the storm, with the total cases in Europe’s five largest economies topping 230,000.

This Week's State Of The Economy - What Is Ahead? - 11 September 2020

In the holiday-shortened week, analysts’ attention remained on the progress of the labor market. Recent jobless claims data remain stubbornly high and point to a slowing jobs rebound.

This Week's State Of The Economy - What Is Ahead? - 03 March 2023

Looking at Q4 GDP, Australia\'s economy grew by less than expected, GDP was flat for the quarter in both Canada and Switzerland, and Sweden\'s economy contracted in the final quarter of last year.

This Week's State Of The Economy - What Is Ahead? - 25 June 2021

Supply chain bottlenecks continue to cause pain-in-the-necks. In spite of all the difficulties, the Economic whizzes in the WF Economics team have upgraded their forecast for full-year 2021 U.S.

This Week's State Of The Economy - What Is Ahead? - 18 December 2020

This week marked the first U.S. COVID vaccinations and the imminent rollout of a second vaccine.

This Week's State Of The Economy - What Is Ahead? - 17 March 2023

Retail sales declined 0.4% during February, while industrial production was flat (0.0%). Housing starts and permits jumped 9.8% and 13.8%, respectively.

This Week's State Of The Economy - What Is Ahead? - 23 September 2022

The FOMC raised the target range for the fed funds rate by 75 bps for the third consecutive time. The housing market continues to buckle under the pressure of higher mortgage rates.

This Week's State Of The Economy - What Is Ahead? - 12 February 2021

Market attention was concentrated on the January consumer price data, as inflation has come back into focus.

This Week's State Of The Economy - What Is Ahead? - 13 November 2020

The combination of the election outcome and a workable vaccine boosted financial markets and set the background music for this week’s short list of indicators.


@ tcgcrealestate

Subscribe Now! IT's Free

Stay up to date with all news coming straight in your mailbox.

Copyright © 2023 TC Global Commercial. All rights reserved.