Houston feeling effects of housing downturn, says Fed

It's not quite clear yet if Houston is feeling the strain of the economic slowdown in the United States, however the weakened housing market is beginning to show itself, according to the Federal Reserve Bank of Dallas.

The Fed did not have employment numbers, but said the biggest indicator for Houston was the slowing down of the housing market. Single-family construction permits were down 27 percent from January 2007, and existing-home sales were down 14 percent. Year-to-date foreclosures were up 16 percent in the first two months of 2008 compared with last year.

The Houston Purchasing Managers' Index slipped from levels indicating strong expansion last fall to modest expansion today, according to the Fed.

In the energy sector, oil prices are at record levels, but sales of both gasoline and chemicals are weak, the agency said.

Other industries reported include:

• Retail and auto sales: Local retailers, with the exception of food stores and some discounters, report "disappointing" sales so far in 2008. January auto sales were down 1.4 percent.
• Nonresidential construction: The value of new building permits was up 27 percent in 2007.