As we turn the page to a new year, I am relieved to say that from an economic perspective, things are definitely looking up. There are clearly challenges ahead, but this year should bring improvement in significant ways. Let’s take a quick look at progress made and obstacles faced in 2021.
The past year brought improvement in COVID-19 dynamics, though the path was anything but smooth. At the outset, case levels in Texas were routinely exceeding 20,000 per day, and more than 14,000 people with the virus were hospitalized across the state. Vaccinations were just beginning, and treatment options were limited. While the Omicron variant has sent cases soaring to start 2022, only about half as many have been hospitalized. While we certainly aren’t out of the woods yet, there is hope that the less virulent Omicron strain will cause fewer serious complications than past surges, reducing the harm to health and wellbeing and the need for actions such as lockdowns or widespread restrictions. New and simpler treatments are also on the immediate horizon.
A major 2021 milestone occurred as Texas surpassed the pre-pandemic level of jobs. In November, strength across the economy led to a new record for total state employment. In less than two years, Texas overcame the loss of about 1.5 million jobs in early 2020 as the pandemic began. In 18 of the previous 19 months, jobs were added, and the unemployment rate has dropped to 5.2%. On a national level, job openings hit record highs and initial claims for unemployment reached historic lows.
We also saw stabilization and emerging momentum in the energy sector. Oil prices were around $50 per barrel as 2021 began, providing welcome relief from the gyrations caused by the pandemic. Texas rig counts had risen to a December average of 155, up significantly from the worst of the COVID-19 shock. As we begin 2022, prices are ranging above $70, and 275 rigs are running. Although the comeback in the industry has been somewhat sluggish, 2021’s price and production levels were sufficient to infuse much-needed cash to financially stressed companies, banks, and investors. Looking forward, I expect even stronger growth, as conventional fuels have an essential role to play in meeting future energy needs (a topic for another day).
The year brought strong progress across a variety of industries, from rebuilding in travel-related businesses to major new tech, automobile, and distribution locations and expansions. Sales tax collections set monthly records for October, November, and December. Notable issues remain, but progress during 2021 was certainly considerable, and we are entering 2022 in a much stronger position as a result. I hope the new year brings you health, happiness, and prosperity. Stay safe!
