A lot of leading indicators are now showing that Dallas may come out of the recession faster than originally thought.

Consumer Confidence
Last week, the Conference Board released a report that said the consumer confidence index rose for the second consecutive month in January. The consumer confidence survey is a monthly measure of the public's confidence in the health of the U.S. economy.

According to Dr. Lyssa Jenkens, chief economist for the Greater Dallas Chamber, "With the consumer confidence level climbing for the second month, this is another signal that conditions will improve in the very near term." The index rose nearly three points to 97.3 from 94.6.

Jenkens believes the improvement comes from rising expectations for both the business outlook and job prospects in the next six months. "Several factors have begun to signal a stronger economy, including new home sales increasing in 2001, durable goods orders up 2 percent as well as more stabilized consumer spending," she said. "Although consumers are starting to feel better about the economy, unemployment rates are still continuing to rise which indicates that a full turnaround is still a few months away."

Dallas business executives are optimistic about the survey as well. Victor Dupuy, Dallas market leader for mid-market consulting of Cap Gemini Ernst & Young, said "Demand is picking up, with companies beginning to decide on which investments they want to make. We are now seeing an increase in interest in business investments from last quarter. We expect to see an improvement during the second quarter as well as sustained growth for the remainder of the year."

Job Growth
Dallas/Fort Worth gained 50,900 net new jobs from December 2000 to December 2001, while several competitive metros lost more jobs than they gained. Although D/FW job growth did slow significantly in 2001, new figures from the U.S. Bureau of Labor Statistics show more severe blows to Atlanta, Chicago, Denver and Phoenix/Mesa, all posting job losses.

Atlanta had net job losses of 60,000 in the same 12-month period. This was the second year Atlanta faced a declining employment growth rate.

The greater Chicago metro area also posted large losses of some 45,500 jobs between December 2000 and December 2001. Chicago had an average annual increase in 2001 of a mere 2,500 jobs, falling from a peak in average annual growth 92,000+ net new jobs in 1998.

The Phoenix/Mesa metro area reported a job loss of 35,800. The Phoenix area's average annual growth was anemic with the addition of only 10,400 jobs in 2001 for a growth rate of less than 1 percent.

Denver/Boulder metro area also reported a job loss of 11,700 during December 2000 and December 2001. Denver achieved average annual growth between 2000 and 2001 of some 33,400 net new jobs or 2.4 percent. The Denver area entered 2001 on strong footing that provided greater resilience in the difficult year.

D/FW now has a total of 2,906,000 total jobs. Last year at this time D/FW reported net job growth topping 107,000 jobs compared to the 50,900 reported in January 2002. The region's average annual employment growth was 84,800 between 2000 and 2001.

"It's important to look at both net job growth and average annual employment because the two together show the direction of the economy." Dr. Jenkens said. "2001 started with growth levels above 100,000 jobs but ended at half that. Coming into 2002, we're entering at 50,000 new jobs, so we can expect a tougher year."

Job growth numbers only tell part of the story. Atlanta, even with its enormous losses, reported an unemployment rate of 3.9 percent in November 2001, up 1.4 percent from the previous year. With huge job losses, it might seem strange that unemployment in Atlanta increased only 1.4 percent.

"Atlanta's labor force has largely stopped growing while D/FW continues to import labor into the area," Dr. Jenkens said. "Atlanta's labor force grew by a mere 34,000 persons, just barely holding onto local population and possibly seeing some outmigration. In the same period, D/FW added 124,000 persons to our workforce, which suggests that we are still importing talent from other areas. Our comparatively high unemployment rate comes from the fact that we are adding labor faster than we can use it, which creates a favorable situation for companies considering moving into the Dallas area"

Both Phoenix and Denver reported rates under 5 percent. Chicago posts the highest unemployment rate of 5.6 percent, up some 1.5 percent from the previous year. Dallas/Fort Worth ranks second only to Chicago with a November unemployment rate of 5.5 percent. Among these top metros, D/FW also has shown the largest increase in unemployment over the last 12 months of 2.7 percent.

"In terms of the local economy, the rapid increase in unemployment as well as the relatively high share of the unemployed reminds us that we are making enormous adjustments in a very short period of time that has a human dimension well beyond the numbers," Dr. Jenkens said. "These unemployment figures provide a note of caution about the impact of the 2001 slowdown on the local D/FW economy."

Recovery
When will D/FW see some relief from the economic slowdown?