Not quite so sunny

FROM 2009 to 2014, one in five jobs created in America was in Texas. Over the same period workers in the Lone Star State—on its own the world’s 13th-largest economy—saw some of the biggest wage rises in the country. Last year it probably grew faster than many emerging markets, such as Lithuania and Mexico. Now, though, things are getting tricky for the state that produces 40% of America’s oil. Despite a recent bump, oil prices are still much lower than they were a year ago. Boosters have claimed that Texas is well-placed to withstand a big price drop. Is this true?

For decades, the fortunes of the Texan economy were tied to oil. In the mid-1980s, after an oil-price crash, the state suffered the savings-and-loan debacle, big house-price declines and a deep recession. Unemployment rose from 6% to 9%, even though it was falling across the country as a whole.