HillCo Partners Economic Update: April 2022

HillCo Partners is a government advisory and consultancy firm that has been in the business since 1998. It was founded by Neal T. Buddy Jones and Bill Miller. The two have been running a tight ship and under their leadership, the firm is a part of some of the most important decision-making circles. It is a one-stop-shop for its clients, as its services include policy analysis, regulatory consulting, lobbying, communications, and public and media relations. The firm has a host of areas of expertise including transportation, utilities, pensions, insurance, health care, finance and taxes, education, and the environment. It keeps its clients informed about economic updates for the State of Texas. It provides these updates to its clients to inform them about the latest trends so that they can have a full understanding of the economic situation of the Lone Star State. These updates include the Sales Tax Revenue, Labor Market Information, Employment, and the Texas Bond Rating.

Sales Tax Revenue

In April 2022, the sales tax revenue totaled $3.8 billion. This is a 12.8 percent increase since last year. The sales tax collected in April is reflective of sales made in March. “The strongest growth was in receipts from sectors driven by business spending, particularly the oil and gas mining sector, which surpassed pre-pandemic levels as capital spending in the sector picks up. Receipts from the construction, manufacturing, and wholesale trade sectors continued to show double-digit growth,” said Glenn Hegar, the Texas State Comptroller. The sales tax revenue is an indicator of continued improvement in the state’s economic activity. The month of March saw increased spending in arts and recreation services, such as concerts, sporting events, and fitness club memberships. Following closely behind are revenues from oil production taxes, hotel occupancy taxes, and then natural gas production tax. 

Texas Labor Market Information

April was a good month for the labor market in Texas. There was an addition of 62,800 jobs. The unemployment rate went down by 0.1 points. The jobs ad index increased by 4.3%. The initial UI claims increased by 558 claims. For the sixth consecutive month, salary and nonagricultural employment reached a new high. Total nonagricultural jobs now stand at an impressive 13,284,500. There was a significant increase in employment in the leisure and hospitality industry, which led to the creation of 13,500 positions. The mining and logging industry created a further 6,600 positions. The unemployment rate in Texas is 4.3%, which is slightly higher than the national unemployment rate of 3.6%. Amarillo, TX recorded the lowest unemployment rate at 2.5% and the highest unemployment rate was recorded in McAllen-Edinburg-Mission. The following is a quick overview of the LMI from the Texas Workforce Commission: 

– Unemployment Rate: 4.3%

– Total Non-Farm Employment: 13,284,500

– Jobs Change over the Year: 742,000 

– Annual Growth Rate: 5.9%

Texas Employment

According to the Federal Reserve Bank of Dallas, the Texan economy continued to improve. There has been a drop in initial unemployment claims as they were close to all-time lows. Price pressures have remained highly elevated. April saw an increase in employment in Texas by 5.7%. According to the Dallas Fed’s Texas Employment Forecast, job growth is expected to increase by 3.7%. 

Texas Bond Rating

A bond rating is an indicator of a State’s ability to pay back its debts. This is an important indicator for investors, as it is telling about a State’s creditworthiness. The higher the rating, the lower the interest rates. Following are Texas’ Bond ratings by major credit rating agencies:

– S&P: AAA

– Moody’s: Aaa

– Fitch: AAA