Patricia Ortiz/ Houston Public Media
Houston’s economy has been doing better than predicted, but a mild recession could still be possible, according to the “Bowtie Economist”, Elliot Eisenberg.
Eisenberg presented for the Greater Houston Builders Association at their annual mid-year economic forecast on Tuesday. At the luncheon, he said the recession hasn’t happened yet because auto sales and home construction are strong.
“Auto sales are very strong because there was pent-up demand,” he said. “… home construction is oddly pretty strong, despite the fact that rates are very high, because existing sales stink, because you’ve got a 30-year, 2% mortgage.”
The U.S. auto industry sold more cars in 2023 than it has since 2019. Eisenberg said that Texas is also growing, especially in Dallas and Houston. He said Houston’s economy has diversified over the years.
In the 1980s, oil prices dropped across the state and caused an economic crisis for Houston.
“Houston was a ghost town. Because there wasn’t much else,” Eisenberg said. “But now, healthcare, which was already moving back then, is now immensely large.”
Eisenberg added unemployment is low and there’s more job creation in the state. Still, voters often have a disconnect between how they feel about the economy and news about it.
“Americans hate inflation much more than unemployment,” Eisenberg said. “Well, unemployment is much more serious. You lose your job, it’s a real problem. But only you lose your job. The nine of us, we don’t care about you, you’re some schmoe. We care about the price level. So this impact of high inflation over a couple of years during COVID has exacerbated problems.”
According to the Greater Houston Partnership, which includes business leaders who want to be involved in Houston’s growth, inflation has risen 3.3% nationwide since last May.
While it’s hard to predict when the recession will happen, Eisenberg said it will be luck against historical trends.
“There’ll be ups and downs and perturbations and oil’s a cyclical industry and so on,” he said. “But healthcare is not. So your economy becomes more wholesome or more diversified. That’s a good thing. And Texas has got a lot going for it. So sit back, relax, and enjoy it.”
