Houston's stake in the looming recession

• Jankowski, who admits he's a glass-half-full economist, points to Houston's positive readings in the Purchasing Managers Index, continuous trade in Houston's ports, and the city's job and population growth as indicators of Houston's stable economy.

Yes, but: Since Houston's economy is closely linked to the U.S. economy — thanks to our decreasing dependence on the oil and gas sector — Jankowski believes that "if it's a very shallow U.S. recession, I think we might be able to skirt it. But if it's a deeper recession, there's no way we can avoid it."

The other side: Bill Gilmer, director of the Institute for Regional Forecasting at the University of Houston's Bauer College of Business, says there is a major slowdown ahead, and it's going to hit hard for consumers after many felt better off during the pandemic with the stimulus checks and low interest rates.

• "There is a slowdown that's going to be sort of one of these neck snapping things where you're looking one way and suddenly find out that you're going in a completely different direction than you thought. I would say that's going to be a big concern," he tells Axios.

Zoom out: Jeff Korzenik, chief economist of Fifth Third Bank, pointed out at a GHP event last week that other cities are not doing as well as Houston, referencing San Francisco's tech layoffs.

• "I will say I do see there is exceptionalism to Houston. You can feel it on the ground. And the problem is, not every part of the U.S. economy looks like Houston. … So I worry about outside effects coming in here," Korzenik says.

State of play: Despite the collapse of Silicon Valley Bank and Signature Bank, the economists don't expect a banking crisis. But banks have been tightening their lending.

Threat level: Banks tightening their lending means there is less money circulating for new ventures and investments, Jankowski says, and less capital for businesses to expand — which can slow down the economy and impact Houston's construction sector.

Between the lines: There is an abundance of office space in Houston, which means buildings are not generating as much cash flow as they once did. That can lead to properties going back to the lender.

The bottom line: While you wouldn't think it with all the cranes in downtown, there may soon be less development as companies are now reluctant to build more.

Zoom in: Houston's unemployment numbers

Houston's unemployment rate is higher than the national average, according to data from the Texas Workforce Commission compiled by the GHP.

Driving the news: The GHP's new report shows Houston's unemployment rate was 4.4% in March.

• The national unemployment rate was 3.5% in March, according to Bureau of Labor Statistics data.

Yes, but: Jankowski tells Axios the numbers shouldn't raise any alarm.

• Houston's higher unemployment rate means a larger number of Houstonians are actively looking for work in a city that saw 140,000 new jobs in the past 12 months, Jankowski says, citing BLS data.
• Plus, he says more people are moving to Houston looking for work, leaving large urban areas like New York City and Los Angeles to seek jobs in the Sun Belt.

What they're saying: "The reason the unemployment rate has gone up is not because of the weakening of the labor market," Jankowski says. "It's because the labor force is growing at a faster [pace] than in other metros."

Meanwhile, the Houston region added 19,900 jobs in March, according to a GHP report.

• The retail sector saw the largest gains with 3,100 new jobs, followed by construction, which added 3,000 jobs as seasonal work picked up.
• The service sector saw 2,600 new jobs; professional, scientific, and technical services saw 2,400 new jobs; and manufacturing added 2,200 jobs.