The Ginn Economic Brief: Texas Economic Situation – March 2024

Originally published at Texans for Fiscal Responsibility. 
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Overview

• Free-market capitalism is the best path to letting people prosper, as it is the best economic institution that supports jobs and entrepreneurship so that more people can earn a living, gain skills, and build social capital. 
• The Texas economy remains a leader in jobs and economic growth, but the state has much to do to advance policies that will let people prosper. But let’s see what the data tell us about the Lone Star State.
• As Texans face an affordability crisis from high inflation, high property taxes, and an uncertain future with a weakening U.S. economy, the Legislature provided some tax relief but not nearly enough because of excessive spending last year. 
• Texas should provide more opportunities for people to prosper, mitigating the affordability crisis and withstanding destructive policies out of D.C. This can be done by passing sustainable budgets, eliminating property taxes, and passing universal school choice. 

The U.S. Bureau of Labor Statistics provides Texas’ labor market data to examine how people are doing across the state. 
Texas’ employment has been up for 44 of the last 46 months since May 2020.

• The establishment survey shows that nonfarm employment has increased by 1.14 million jobs since pre-COVID lockdowns in February 2020 to 14.1 million in February 2024, the fourth-best jobs recovery since then. The household survey shows that employment has increased by 1.0 million to 14.58 million jobs since February 2020. 
• In February, nonfarm employment increased by 49,800 jobs (the third-largest percentage increase of any state, at 0.4%, as 12 states had declines or essentially no growth), and it has been up for 44 of the last 46 months. The household survey also showed employment increased, but by 19,854 jobs in February, and it has also been increasing for 44 of the last 46 months. 

Texas workers gain jobs in most industries, and many people gain purchasing power. 

• Nonfarm jobs were up by 291,400 over the last year (the most in the country) to 14.1 million, for a 2.1% increase (the 7th fastest). Jobs in the private sector rose by 225,900 over the last year to 12.02 million (85% of total jobs), and government employment increased by 56,600 to 2.05 million (15% of total jobs). 
• Figure 1 illustrates how most major industries increased employment in February 2024 compared with February 2023. Still, a few industries had increases in average weekly earnings that did not keep up with chained CPI inflation of 2.9%, meaning they lost purchasing power.

Figure 1. Texas Labor Market by Industry

​Source: U.S. Bureau of Labor Statistics

Economic growth has picked up, but personal income lags the U.S. average.

• Figure 2 illustrates the recent report by the Bureau of Economic Analysis (BEA) that annualized growth in real GDP in Texas was up 5.7% in 2023 (well above the 2.5% growth for the U.S. average) ranked 2nd best in the country to $2.1 trillion. It grew by 5.0% annualized in Q4:2023, ranking 5th best.
• The BEA also reported personal income growth for Texas grew by 6.2% in 2023 (ranked 7th) to $2.0 trillion (above the 5.2% growth for U.S. average). It increased by 5.2% annualized in Q4:2024, ranking 8th best in that quarter.  

Figure 2: Real Gross Domestic Product by State in 2023

​Improve the Texas Model with pro-growth policies that limit government by:

• Spending Less: Lower state government spending and pass sustainable state and local spending limits.
• Taxing Less: Start eliminating local property taxes with surpluses at the state level to buy down school district M&O property taxes and at the local level by using their own surpluses to buy down their own property tax rates until all property taxes are eliminated. Texans must stop renting from the government and start owning their property with the elimination of property taxes.
• Regulate Less: Remove barriers to work, reduce occupational licensing, reform safety nets, and enact universal school choice. 

Strengthening the Texas Model will help Texans better resist D.C.’s overreach, be more competitive with other states, and, more importantly, flourish more for generations to come. Let’s start today!