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Economic forecasts continue to look strong for Texas, the United States, and the world, but there is some uncertainty ahead. In December, U.S. jobless claims reached a 52-year low, and the Department of Labor’s January jobs report was even better—nearly 500,000 jobs added, and job totals for the previous two months revised upward by more than 700,000. The U.S. economy is showing broad signs of health as consumer spending is up, businesses are increasing investment, and supply-chain problems begin to fade. Stock market indexes have broken numerous records over the last year. Here in Texas, higher oil prices have driven a resurgence in fracking, particularly in the Permian Basin, which has roared back to life and has set oil output records for three consecutive months through January 2022.
However, the chairman of the Federal Reserve, Jerome Powell, indicates the Fed is going to begin to pull back on financial market support and increase interest rates in response to quickly rising inflation.
Simultaneously, tension over a potential Russian invasion of Ukraine has rattled markets, and the ongoing surge of the COVID‑19 omicron variant continues to act as a drag on the economic recovery. In the near term, it is expected that the Texas recovery continues and state revenue collections remain strong, despite some headwinds.
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