Low Oil Prices Fueling A Texas Recession? Economists Disagree
Economists don’t seem to agree on whether the plummeting price of oil could cause a recession in Texas next year.
The price per barrel has dropped to $55, about half of where it was during the first part of 2014.
Michael Feroli, the chief U.S. economist at J.P. Morgan Chase, recently told clients that Texas is “at risk of slipping into a regional recession” because of the decline in oil prices.
However, Economist Michael Plante with the Federal Reserve Bank of Dallas, doesn’t think a recession is on the horizon.
“In recent months we’ve seen oil prices fall quite a bit, but the non-oil sectors of the Texas economy look like they’re in good health,” Plante said Monday.
“We’ll probably see slower growth than we’ve seen in recent years, but the job losses at this point don’t appear like they’ll be big enough to bring growth to a complete halt,” he said.
Plante expects Texas to lose around 125,000 jobs next year, and the state will probably have less oil and gas revenue in its budget. He says the type of recession Texas experienced in 2009 when there was a net loss of jobs isn’t likely to materialize.