LNB Economic Index for January: Retail sales rebound strong, construction still going strong
Lubbock’s healthy economy entered the new year on a roll in many areas and here are Chip Gilmour’s seven takeaways from Lubbock National Bank’s January Lubbock Economic Index.
- Retail sales – struggling recently – took a big leap with 5.9 percent growth over January 2016. It marked only the fourth time in the last 14 months spending logged a year-over-year increase. Gilmour said the rebounding oil and gas industry is putting more money in people’s pockets. “Spending and housing are up in the Permian Basin,” he said, adding many people in Lubbock and the South Plains also have energy-sector jobs or benefit from it. Gilmour also said consumer confidence may be boosted by the stock market “Trump bump.” “People are anticipating a decline in taxes. People are seeing a huge improvement in retirement savings. Just look at 401K and other retirement accounts in the last six months and it has to be a major plus for consumer confidence,” Gilmour said.
- Construction continues to put up staggering numbers along with lots of structures. “New home permits are up 70 percent over a year ago,” said Gilmour, the highest January total since 2013. The ongoing growth follows a record-breaking year in 2016. So, yes, it’s still a good time to buy a house.
- Oil prices inched closer to $50 a barrel in January, up 71.2 percent from a year ago with predictions to go up around $55-60 a barrel, said Gilmour. This affects the West Texas economy in many positive ways, he said.
- Cotton continues to climb out of its prolonged slump – getting above 70 cents a pound in January and a bit higher than the previous month – but up 21.4 percent from a year ago. Like oil, increased cotton prices also benefit the West Texas economy.
- The jobless rate was 3.4 percent in January, tied with Amarillo for lowest in the state and the year-over-year growth rate of 2.7 percent was seventh best out of Texas’ 26 metro areas.
- The Lubbock Consumer Price Index was unchanged in January from the previous month at 1.8 percent. The food/grocery sector dropped .3 percent, while energy costs rose .5 percent.
- The Index’s overall number fell a bit, to 149 after hitting a record 149.3 in December, but still 3.2 percent higher than January a year ago. Gilmour said the Index calculates a three-month running average for sales tax/consumer spending and that, along with a drop in auto sales, contributed to the overall number dropping. “Three-tenths of a percent is nothing to be concerned about compared to the overall number,” he said.
Lubbock National Bank Senior Vice President Chip Gilmour briefs local media each month on the report.
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