The Texas economy’s recovery is still on a solid path, but the pace of growth has slowed since March, economists from the Federal Reserve Bank of Dallas said.

Labor shortages and supply-chain woes are two main factors contributing to the slowing growth based on this May’s numbers, senior business economist Laila Assanie and research analyst Carlee Croker said in a Thursday report.

“The Texas economy is on the path to a solid recovery, although the pace of growth has slowed due to supply-side issues, such as difficulty finding workers, and wide-scale shortages of materials,” Assanie said.

The report found that other indicators, like unemployment claims and consumer spending along with daily COVID-19 cases, still show continuing improvement.

The Federal Reserve Bank of Dallas released May employment numbers last Friday, with Texas adding 26,100 jobs in May and dropping its unemployment rate from 6.7% to 6.5%.

But, according to this Thursday’s report, elevated labor demand is outpacing supply, with half of Texas firms trying to fill open positions.

The majority of those firms are finding the search difficult, particularly for “low-skill positions,” the report said based on May Texas Business Outlook Surveys data.

After the May numbers were released, the Federal Reserve Bank’s employment forecast declined to 4.1%, suggesting that all the jobs lost since the beginning of the COVID-19 pandemic are unlikely to be recovered by the end of 2021.

Federal unemployment benefits are also set to end for Texans after June 26, after the state opted out of federal COVID-19 unemployment assistance.

The report estimated the withdrawal of funding amounts to $2.9 billion per month but also said the impact of is still unclear, with labor shortages improving but overall spending likely to decrease.

>>>ad: Don't Miss TODAY'S BEST Amazon Deals!

Originally Appeared Here