Houston could soon follow national pattern

December 2, 2008 5:03:25 AM PST
Local economists say oil prices have helped keep the economy here strong, but that's starting to change. [CHECK THE MARKETS: Get the latest numbers from Wall Street]
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During yesterday's trading, oil fell $5.15 to $49 a barrel. That could be bad news for the Houston economy.

"With falling oil prices, I think we're going to see more of the effects that the rest of the country has been experiencing," said Rice University economist John Diamond.

The local housing industry is also is starting to decline. Last month, home prices dropped about 1.6 percent, but they are still up for the entire year. And the Home Association's chief economist predicts next year's prices will also rise by about 5 percent.

As for the unemployment rate for the Houston, Baytown and Sugar Land area, it increased to 5.4 percent last month. That's up almost 1.5 percent from last year, but compared to the rest of the country, it's not nearly as bad. Last year, nationally the rate was 4.4 percent. This year, it has jumped to 6.1 percent.

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