February 9, 1972
Recent trends in the major indicators of economic activity within the District were mixed. Some sectors continued to advance, but areas of sluggishness were evident. Employment in the five southwestern states fell in December, and the unemployment rate rose slightly. Industrial production in Texas slipped in December, after advancing to a record high in November. Construction activity in the five-state region continued its upward trend. In the retail sector, department store sales showed further strength, but registrations of new automobiles were down.
Seasonally adjusted, total employment in the five southwestern states edged downward slightly in December. And with the labor force in these states showing a slight increase, the unemployment rate rose to 4.9 percent, compared with 4.8 percent in November. In spite of this increase, however, the unemployment rate for these states was still below the year-earlier rate of 5.1 percent and well below the Nation' s rate for December of 6.1 percent.
Nonagricultural wage and salary employment was up slightly over November, with increased employment in nondurable manufacturing and most nonmanufacturing industries accounting for virtually all of the gain. Employment in services, transportation, and public utilities recorded the largest advances, while mining and trade were the only nonmanufacturing sectors to show employment declines.
The seasonally adjusted Texas industrial production index eased slightly in December, after advancing to a record level in November. The small drop resulted from declines in all three major categories of industry—manufacturing, mining, and utilities. Total manufacturing also fell slightly from November, although the production of nondurable goods increased somewhat. Changes in the output of almost all manufacturing groups were moderate. Among durable goods' industries, only lumber and wood products showed increased output. Production of all other durables declined moderately. Mining output continued to edge downward despite a sizable rise in the production of natural gas. Production of crude oil and natural gas liquids fell slightly. Utility output was also down, as the distribution of electricity fell sharply.
The Texas oil allowable was increased for February. This advance was the largest since October 1970 and the third consecutive rise after seven monthly reductions. The allowable for Louisiana was raised for the first time in three months, while the allowable in Oklahoma remained unchanged.
Construction activity in the five southwestern states, as measured by the value of contracts awarded, increased slightly in December. Residential building continued to be the major emphasis in building activity as it rose in December and remained well ahead of the year- earlier level. Nonresidential building was also up slightly after falling sharply in November. Nonbuilding construction activity, however, declined in December. The cumulative value of contracts awarded in the five-state region in 1971 was more than 20 percent higher than a year earlier.
Recent indicators of retail spending were mixed. Registrations of new passenger automobiles fell 7 percent from the month before in Dallas, Fort Worth, Houston, and San Antonio. But cumulative registrations in the four centers for the year were 20 percent greater than in 1970. Department store sales in the Eleventh District were 11 percent higher in the four weeks ended January 22 than in the corresponding period a year before. Total sales for 1971 were 7 percent higher than in 1970.
The cotton harvest in Texas and Oklahoma, which was the latest in 20 years, is nearing completion. The cotton harvest in Arizona, Louisiana, and New Mexico is also virtually finished. The cotton crop in the District states is expected to total slightly less than 4.3 million bales. That is well below the 4.6 million bale crop in 1970. Higher prevailing prices for all quantities of cotton are partially offsetting the production losses which were attributable to unseasonably cold and wet weather. Livestock conditions are generally good in the District. On January 1, Texas had 20 percent more cattle on feed than a year earlier, but the number on feed in Arizona declined slightly during the same period. The index of livestock and livestock products rose substantially from mid-November through mid-January as beef cattle and hog prices were up sharply.