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Report: Consumer spending boosted Texas economy
 


EMILY SCHMALL, Associated Press

FORT WORTH, Texas (AP) — Steady growth in consumer spending, spurred by increasing disposable income and job creation, has helped fuel the Texas economy over the last 15 years, according to a new report by the U.S. Commerce Department's Bureau of Economic Analysis.

The government released Thursday its inaugural report analyzing consumer spending data by state, which reveals the nation's uneven recovery from the Great Recession. The report considers data from the calendar years 1997 through 2012.

North Dakota led the nation in 2012 with a 9.2 percent increase in per capita personal expenditures, compared to a 3.3 percent advance nationally. Texas, Oklahoma and Utah followed, with gains in consumer spending of between 4 and 4.2 percent, suggesting that the boom in hydraulic fracturing has stimulated greater overall spending in areas where the oil and gas drilling method is taking place, said James Galbraith, an economist at the University of Texas at Austin.

"Fracking probably accounts for a fair share of the difference between Texas and other states. One 'tell' that this is due, in good part, to the fracking boom, lies in the fact that Oklahoma is also a fast-growth state. Also (North) Dakota," Galbraith said.

In Texas, personal expenditures rose in tandem with disposable income.

"The Texas economy has been on a bit of a tear," Dallas Federal Reserve economist Pia Orrenius said. "It's very related to the mini oil boom," she said.

Texas has led the nation in job growth, with high labor demand boosting incomes.

Per capita spending in Texas rose 4.1 percent from 2011 to 2012 on the strength of autos and auto part sales and transportation services, including oil and gas tankers, trains and trucks carrying drilling equipment. A pressing shortage of truck drivers statewide has resulted in huge increases in compensation for drivers and other service providers to the energy sector.

Texas consumers spent more on cars, auto parts, gas and energy products when compared to the three other states with the largest populations — California, New York and Florida. And Texas consumers spent more than twice what New York did on cars and parts.

Conversely, of the four states, Texas consumers spent the least on housing and utilities — second only to Mississippi — and about 57 percent of what Californians spent on health care.

 

 

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Midterms
What was the message of the midterm elections?