Earlier it was the Chicago PMI raining on the economic recovery parade. Now it's Houston.
The pain of weak energy prices continues to take its toll. With the Fed set to hike interest rates next week in what many believe is a done deal, Yellen and her crew may be positioning themselves at exactly the right place and time to do exactly the wrong thing.
A current story making the rounds is Fed concern about what effect higher rates might have on auto sales.
Houston’s economy continued to struggle with oil industry layoffs and cutbacks in November, as well as losses in manufacturing and trade that have reversed recent gains in the energy capital of the world.
The Houston Purchasing Mangers Index, a closely watched predictor of the city’s economic health, slipped to 45 points in November, signaling a contraction in economic activity for the 11th straight month. Readings below 50 indicate contraction.
The oil and gas sector and related industries showed significant signs of weakness, with exploration and production firms and oil field service providers curtailing spending plans and paring back budgets to brace for a prolonged period of anemic crude prices.
“Our businesses continue to right-size in order to align with the prices of oil and gas, which are now expected to be these levels for longer term,” one respondent from the oil and gas sector said in the survey conducted by the Institute for Supply Management.
“Employment reductions are continuing,” another said.
fuelfix.com/blog/2015/12/10/houstons-economy-stumbled-again-in-november-index-shows
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