“Bowtie Economist” Says Houston Does Better Than Expected in Mid-Year Economic Forecast – Houston Public Media

Houston’s economy is doing better than expected, but a mild recession could still be possible, according to Bowtie Economist Elliot Eisenberg.

Eisenberg presented his annual mid-year economic forecast for the Greater Houston Builders Association on Tuesday. At the luncheon, he said the recession had not yet occurred because auto sales and home construction were strong.

“Auto sales are very strong because there is pent-up demand,” he said. “…home construction is oddly enough strong, despite the fact that rates are very high, because existing sales stink, because you have a 2%, 30-year mortgage. »

The U.S. auto industry sold more cars in 2023 than it has since 2019. Eisenberg said Texas is also growing, including Dallas and Houston. He said Houston’s economy has diversified over the years.

In the 1980s, falling oil prices across the state caused an economic crisis in Houston.

“Houston was a ghost town. Because there wasn’t much else,” Eisenberg said. “But today, the healthcare industry, which was already evolving back then, is now extremely large. »

Eisenberg added that unemployment is low and there is more job creation in the state. However, voters often have a disconnect between what they think about the economy and the news about it.

“Americans hate inflation much more than they hate unemployment,” Eisenberg said. “Well, unemployment is much worse. You lose your job, that’s a real problem. But only you lose your job. The nine of us don’t care about you, you’re an asshole. We care about the price level. So this impact of high inflation over a few years during COVID has exacerbated the problems.

According to the Greater Houston Partnership, which brings together business leaders interested in getting involved in Houston’s growth, inflation has increased 3.3% nationally since last May.

Although it is difficult to predict when the recession will occur, Eisenberg said it would be fortunate, contrary to historical trends.

“There will be ups and downs and disruptions and oil is a cyclical industry and so on. “, did he declare. “But health care is not. Your economy thus becomes healthier or more diversified. This is a good thing. And Texas has a lot to offer. So sit back, relax and enjoy.