July 18, 1972
The economy of the Southwest is somewhat stronger than a year ago in the opinion of economic analysts with the Southwest Regional Office of the U.S. Department of Labor, the District states' Labor Commissions, and Directors of Business Research at five southwestern universities. District economic indicators also suggest an improved economy. Industrial production, construction contracting, and consumer buying are all moving upward from relatively advanced levels. However, only a slim minority of the analysts contacted feel that labor market conditions will improve by year-end.
Most of the respondents view the present level of employment as about the same as it was at the end of last year. But a few analysts reporting on Oklahoma and Louisiana feel that the situation has worsened in those states. Most respondents indicate that the unemployment problem in their region is concentrated in the larger cities with the smaller cities being relatively unaffected. However, counties with defense industries, Indian reservations, or large numbers of migratory farm workers are also feeling the pinch. For the District as a whole, defense and oil and gas industries are cited as ones in which unemployment problems are most severe. However, a number of other industries are also reported as contributing to the unemployment problem in the various District states, including construction, retail trade, and transportation equipment and electrical machinery manufacturing.
Moreover, the respondents' outlook for employment in the Southwest is not particularly optimistic. Only 11 percent of the respondents feel that the situation will improve by year-end, with 67 percent anticipating no change, and 22 percent feeling that there will be some further increase in unemployment by year-end 1972. Respondents feel that the closing of established plants is the greatest source of unemployment while stating that expected growth in employment would come primarily from the opening of new plants in their respective areas.
Those that expect some improvement in the unemployment situation feel that it will be selective—likely to occur principally in construction, trade, state and local government, and apparel, rubber and plastics manufacturing. Those anticipating no change or a worsening in unemployment emphasize the anticipated growth in the labor force. They point out that the labor force has increased substantially since a year ago, reflecting in part returning veterans, entering youth, and migration.
District economic indicators continue to reflect growing strength. The seasonally adjusted Texas industrial production index edged further upward in May to a new record level. All durable manufacturing industries posted gains from April to May to provide most of the strength in the index. Oil allowables in all four producing states of the Eleventh District were left unchanged again for July at maximum levels.
Department store sales posted significant month-to-month and year- to-year gains in June. Registrations of new passenger cars in Dallas, Fort Worth, Houston, and San Antonio rose significantly in May over the previous month. Cumulative figures for the first five months show auto registrations in these four metropolitan areas more than 12 percent above the 1971 level. Total employment in the five southwestern states rose only slightly in May, however, and was accompanied by an expansion of the labor force. All industry groups showed year-to-year increases in employment with the largest advance registered in construction. The seasonally adjusted unemployment rate for the five southwestern states held steady at 4.4 percent for the third month in a row.
Texas regained its standing as the nation's leading cattle feeding state on June 1. The index of prices received by Texas farmers during the month ending June 15 rose to a level 18 percent higher than a year ago. Higher prices for cattle, hogs, lambs, wool, mohair, and cotton accounted for the increase. Total credit at weekly reporting commercial banks in the Eleventh District rose significantly in June with sizable increases in both loans and investments accommodated by a substantial expansion in time and savings deposits.