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Economy at a Glance - February 2021

In this edition we explore the impact of the coronavirus on Houston in 2020 with a glimpse at what 2021 has in store.
Published on 2/19/21

Houston: The Economy at a Glance is a free monthly publication, which offers the latest data along with expert commentary on the Houston region’s economy. Below is an excerpt from the report.

REASONS FOR HOPE

There’s light at the end of the tunnel. New COVID-19 cases continue to plummet. Fewer Americans are being hospitalized. The death rate peaked in January and has declined steadily since. More people are receiving the vaccine.

The logistics of the vaccine rollout continues to improve. The Biden Administration has announced plans to purchase an additional 200 million vaccine doses, bringing the total ordered by the U.S. to 600 million, which should be enough to vaccinate 300 million Americans, the entire adult population, by the end of July.

CORONA VIRUS IN THE U.S.

 

Total Reported

On February 12

14-Day Change

Cases

27.5 million+

99,488

-38%

Deaths

480,683

5,459

-6%

Hospitalized

 

71,504

-28%

Source: The New York Times; 14-day change based on 7-day average

But it’s too soon to declare victory. Though the U.S. has struggled with its vaccine rollout, other nations have fared much worse. The global economy won’t recover until more of the population is vaccinated. New variants of the virus are emerging which could lead to further outbreaks. And everyone still needs to wear a mask and practice social distancing until health officials announce the virus is under control. But the trends are headed in the right direction.

To extend the metaphor, the U.S. still has some distance to travel before the train arrives in the station. U.S. gross domestic product is $267.9 billion shy of where it stood prior to the pandemic. The consensus among economists is that GDP will reach that benchmark no later than the second quarter of this year.

The nation has recouped 12.7 million of the 22.6 million jobs lost in the downturn. That leaves nearly 10 million Americans without jobs who had jobs this time last year. 

January’s report, a net gain of only 49,000 jobs, has spurred concerns that the recovery may be slowing. Even so, many economists expect this to be a strong year for job growth. IHS Markit forecasts the U.S. will add 6.7 million jobs in ’21, Oxford Economics predicts 5.8 million, and the consensus among economists polled by The Wall Street Journal is that the U.S. will add 4.8 million jobs. These forecasts suggest the nation will still finish the year 3.2 million to 5.1 million jobs shy of its pre-pandemic level.

Initial claims for unemployment benefits continue a bumpy trend downward. The U.S. Employment and Training Administration (ETA) reports 861,000 workers filed claims the week ending February 13, 2021, well below the recession peak of 6.9 million the week ending March 28, 2020. That suggests fewer layoffs are occurring. However, recent claims remain well above the pre-recession average of 235,000 claims per week.

Data from the Institute for Supply Management indicates growth continues but at a mixed pace. Its manufacturing index registered 58.7 in January, down from 60.5 in December. The services index also registered 58.7 in January, up from 57.7 the month before. Readings above 50 indicate activity is expanding across the sector while below 50 signals contraction. 

A few other positive signs:

  • Industrial production, the output of all mines, utilities and manufacturing plants in the U.S., rose 1.6 percent in December, the largest gain since July. The gain was well above Wall Street expectations of 0.5 percent. 
  • Household income, what families received from wages, investments and government-aid programs, climbed 0.6 percent in December compared to the prior month.
  • Jerome Powel, chair of the U.S. Federal Reserve, has signaled the Fed will continue bolstering the U.S. economy through low interest rates and hefty asset purchases well into the future.
  • Though Democrats and Republicans disagree on the specifics, both agree additional U.S. stimulus is needed. A package will likely pass both the U.S. House of Representatives and the Senate in the next few weeks.

 

Note: The geographic area referred to in this publication as “Houston,” "Houston Area” and “Metro Houston” is the nine-county Census designated metropolitan statistical area of Houston-The Woodlands-Sugar Land, TX. The nine counties are: Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery and Waller.

To continue reading, please download the full report. 

Key February Takeaways

Here are the facts to know about the Houston region this month
1
February Takeaway #1
January’s report, a net gain of only 49,000 jobs, has spurred concerns that the recovery may be slowing. Even so, many economists expect this to be a strong year for job growth. IHS Markit forecasts the U.S. will add 6.7 million jobs in ’21, Oxford Economics predicts 5.8 million, and the consensus among economists polled by The Wall Street Journal is that the U.S. will add 4.8 million jobs. These forecasts suggest the nation will still finish the year 3.2 million to 5.1 million jobs shy of its pre-pandemic level.
2
February Takeaway #2
The outlook for oil and gas began to improve as the economy reopened. Prices inched up throughout the year. As of the second week of February ’21, WTI traded at $58 per barrel on the spot market.
3
February Takeaway #3
The impact of COVID-19 was felt rather quickly. In February, there were only 135,000 unemployed workers in metro Houston. By April, that had jumped to nearly 465,000. The unemployment rate skyrocketed to 14.3 percent. Texas’ rate topped out at 13.3, the U.S. rate at 14.4.

Want to learn more? Contact our Research Team:

Patrick Jankowski, CERP
Senior Vice President, Research
713-844-3616
Elizabeth Balderrama
Manager, Research
713-844-3614

Previous Issues of Economy at a Glance

JAN
2021
Racial Demographics and Population Shifts
Read Report
NOV
2020
U.S. Recovery, 2021 Outlook
Read Report
OCT
2020
U.S. Recovery, Houston Update
Read Report
SEP
2020
COVID-19 Impact on Economy
Read Report
AUG
2020
Energy Change Over Time
Read Report
JUL
2020
COVID-19 Update, Houston Unemployment
Read Report
JUN
2020
COVID-19 Update, Affected Sectors, Energy
Read Report
MAY
2020
U.S. & Texas Outlook, GDP
Read Report
APR
2020
COVID-19 Update, PMI, Industry Outlook
Read Report
MAR
2020
Economic Impact, Global Outlook, Recession Probability
Read Report
FEB
2020
U.S.-China Trade Deal, USMCA
Read Report
JAN
2020
Houston GDP, Energy, Jobs
Read Report
DEC
2019
Sector by Sector Forecast for 2020
Read Report
NOV
2019
Houston Region Demographic Update 2
Read Report
OCT
2019
Houston Region Demographic Update 1
Read Report
SEP
2019
Houston's Growth Engines
Read Report
AUG
2019
PMI, Commercial Real Estate & Housing
Read Report

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