Dallas TX employment growth sputtered in December with the non-adjusted numbers from the Texas Workforce Commission showing a gain of 2000 jobs for DFW in December. That’s a far cry from the strong numbers seen in November, but the yearly gains were still respectable. Over the 12 month period the Dallas-Fort Worth-Arlington MSA added 91,700 jobs.

Dallas Fort Worth is still running hotter than the Houston region, with CPI numbers that are almost twice as strong (3.2% vs 1.7%). The official (massaged) unemployment rate in Dallas stood at 3.6% in December. Houston posted an unemployment rate of 5.3 percent last month.

Dallas followed the trend of lower employment growth in December throughout the state. Texas as a whole managed to gain just 400 total jobs in December. Local senior Fed economist, Pia Orrenius, was still optimistic for 2018, although the Dallas Fed revised its job growth prediction downward from 3.0 percent to 2.8 percent. I suspect they will have to revise it even lower unless the Fed continues completely bails on their balance sheet unwind promises.

As evidenced from this week’s SOMA report, Fed officials are already raising a white flag in deference to markets, falling well behind their stated normalization goals into the 2nd quarter of the process. Amazingly the Fed INCREASED their account holdings by $4.6 billion in the latest weekly account update. U.S. Treasury yields have been marching higher for the last 4 weeks, and the Fed is apparently getting cold feet when it comes to selling off their mortgage-backed securities portfolio. You can rest assured that FOMC officials are worried about a quick spike in mortgage rates even if they don’t publicly admit it.

Keep a close eye on what the Fed does, not what it says. Fed economists are notoriously optimistic precisely because they are charged with running cover for the Fed’s policies, regardless of how bad they may be. As we have seen during the last decade of revisionist history, they won’t tell you things are getting sketchy until well after reality has hit them in the face.