March 22 (Bloomberg) -- Texas, the second-most populous U.S. state, is among the first to emerge from the recession that began in December 2007 as job growth returned sooner, Comerica Inc. said in a report.
The Texas economy followed states into the worst economic slump since 1930s, bottomed in September 2009 and began growing, five months before job growth hit bottom for the rest of the country, according to the report today by Dana Johnson, the chief economist at the Dallas-based bank.
The turnaround should mean state revenue will return to growth sometime in the next year as more jobs generate new tax income, said Johnson, in an interview. Texas collected $1.6 billion from sales tax, which supplies half of the state’s general fund budget, in February, an 8.8 percent decline from a year earlier, Comptroller Susan Combs said March 10.
“Tax revenues will come back,” said Johnson. “It was a difficult recession in Texas, but it was a little less bad than the national recession.”
National unemployment bottomed out at 4.4 percent in early 2007, while it stayed between 4.3 percent and 4.4 percent in the state through that year, according to data compiled by Bloomberg. National unemployment hit 10.1 percent in October while it remained at a peak of 8.2 percent in Texas.
Texas will benefit more than other states from the national rebound in manufacturing and industrial production because of the state’s diversified and sizeable manufacturing base, the report said. Manufacturing accounts for 13 percent of Texas’s gross domestic product, the report said.
The report predicted the state’s low unemployment rate would continue to draw employees seeking work. Last year the state’s population of about 24 million people expanded by 2 percent, more than twice the national rate, Comerica said in its report.