July 2020 Economy At A Glance

By: Taro Chellaram /Wells Fargo Economics & Financial Report/Jul 30, 2020

July 2020 Economy At A Glance

COVID-19 UPDATE

The recent surge in COVID-19 cases indicates that elected officials re-opened the economy too soon, that too many Americans are flaunting social distancing guidelines, and that the virus is likely to be around longer than we’d hoped. On July 14, the U.S. recorded nearly 59,000 new cases, up from 22,000 cases on June 14. Texas logged 10,745 cases that day, Houston nearly 2,600 cases. That’s a five fold increase over the month for the state and the metro area.

 

Business Closures

The popular website Yelp.com publishes crowd-sourced reviews on local restaurants, retailers, entertainment venues and personal services. Yelp reports that 177,000 U.S. business on its site were closed between March 1 and April 19. As of June 15, only 37,000 had reopened. In Houston, the pandemic forced the closure of 3,518 Yelp businesses, of which only 578 had re-opened by mid-June.

 

The Outlook

The current recession can no longer be seen as a brief shutdown in which Congress passes enough safety nets and stimulus packages to bridge the gap. The number of active business owners in the U.S. plummeted by 3.3 million or 22 percent in March and April.

 

Though the nation has recouped some of the jobs lost in March and April, there are still 16.6 million unemployed workers in the U.S.

 

HOUSTON EMPLOYMENT UPDATE

Metro Houston added 73,800 jobs in May, a record for any month. The jump came as Governor Greg Abbott issued orders reopening the state’s economy early in the month. Despite the surge, local employment remains 276,400 jobs below its February pre-COVID level. The largest job gains occurred in accommodation and food services, retail and health care. Mining and logging (energy), professional, scientific and technical services, other services, and government continued to lose jobs. Only finance and insurance has returned to its pre-COVID employment level.

 

Crude Oil

The closing spot price for West Texas Inter-mediate (WTI), the U.S. benchmark for light, sweet crude, averaged $39.22 per barrel the last week of June ’20, down 32.8 percent from $58.38 for the same period in ’19.

 

Home Sales

Houston realtors sold 9,238 single-family homes in June ’20, up 15.7 percent from 8,063 in June ’19. The average price for a single-family home sold in June was $319,881, down 0.6 percent from $321,884 a year earlier. The month ended with 11,610 pending sales, a 39.3 percent increase over June ’19.

 

Rig Count

Baker Hughes reports 258 drilling rigs working in the U.S. during the first week of July ’20. That’s down 700 rigs, or 73.1 percent, from the same week in July ’19.

 

Unemployment

Houston’s unemployment rate fell from 14.2 in April to 13.9 in May. It had been as low as 3.9 percent in February.




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