State Economic Watch

Housing prices moved modestly higher in July according to the latest release of the S&P Cotality Case-Shiller Indices. The National Composite Index (NSA) increased 1.9% y/y in July, compared to the 1.6% annual gain reported in June. However, the press release notes that “home prices continued to decline in real terms in July 2026, marking the 14th consecutive month of real declines”. The largest eastern US metros continue to post the highest y/y growth rates in the 20-City Composite Index, led by Chicago (+6.86%), New York (+5.78%), Cleveland (+4.22%), Miami (+3.53%), and San Francisco (+3.48%).  The West and Sunbelt metros generally continue to post the largest y/y losses. Seattle saw the largest decline at -1.57%, followed by Las Vegas (-1.29%), Denver (-1.09%), Tampa (-0.73%), and Portland (-0.65%).

Texas Governor Greg Abbott issued a 30-day disaster declaration on Monday over the price of diesel fuel. According to the press release from the Governor’s office, the declaration allows for the expanded use of dyed diesel on the state’s roads. As the press release explains, dyed diesel is an “off-road fuel marked red, typically used in agricultural operations, and sold without a motor-fuels tax”. The declaration also “suspends state oversize and overweight permitting requirements for vehicles loaded with fuel, agricultural, or timber products”. At the same time, Abbott has requested a waiver from the USEPA from “ultra-low sulfur diesel requirements”. This waiver would reportedly increase diesel fuel availability in the state. 

The Texas manufacturing sector saw a strong increase in activity again in September according to the results of the Federal Reserve Bank of Dallas Texas Manufacturing Outlook Survey . The top line production index increased 13.4 points m/m to 29.5. This was the third consecutive monthly increase in this index and its highest reading since July 2021. Similarly, other indexes such as new orders, capacity utilization, and shipments all hit multi-year highs. Even the employment index moved 7.1 points higher m/m to 15.1. Despite these strong results, optimism among Texas manufacturers appears to have weakened somewhat, with the six-month forward expectations indexes all coming in flat to slightly lower m/m in September.  

Pirelli North America will invest $1.2 billion to expand its Rome, Georgia production facility according to a press release from the Georgia Governor’s office. The new facilities are expected to be fully operational by 2033 and are expected to generate 1,000 new jobs. The existing Pirelli Rome facility currently employs 234 people.

On Friday, September 25, Kentucky Governor Andy Beshear signed an executive order creating the Governor’s Office of Music to support the state’s music industry. The office will be charged with “highlighting Kentucky’s storied music legacy and to supporting Kentucky artists, venues, festivals and music businesses”. According to the press release , the arts industry in Kentucky generates $6.9 billion in economic activity and accounts for 51,000 jobs. 

A new report from the Maine Office of New Americans concludes that the state could see an economic impact from aggressive federal immigration policies of between $395 million and $3.3 billion and a loss of between 1,800 and 15,100 jobs. The report, authored by the Wallace Economic Advisors, LLC, utilizes low-mid-high enforcement scenarios to model the economic impact to the state of the federal government’s immigration activity.  According to the results, the greatest hit to employment would be experienced in the health services sector, but the biggest economic impact would come from the manufacturing sector.

The services sector in the Tenth Federal Reserve District continues to be weak according to results of the Federal Reserve Bank of Kansas City’s September Services Survey . The top line composite index improved slightly from the -3 reported in August to a neutral 0 in September, but still far below the 14 registered in July 2026. Similarly, the general revenue/sales index improved to 6 from 0 in the prior month, again still meaningfully below July’s reading of 19. The employment indexes, employee count, part-time employment and hours worked, were all lower m/m and in negative territory in the September survey.  After plunging in August, the six-month expectations indexes recovered somewhat in September, with the composite index increasing to 12 from 5 in August, and the general revenue/sales index increasing to 17 from 12. However, both of these indexes are well below their respective June peaks of 26 and 41. Finally, the employment six-month expectations indexes improved slightly,...