SAN ANTONIO — The Texas economy is cruising along just fine despite Hurricane Harvey's wrath, swirling political questions about NAFTA and a crackdown on immigration, the president of the Dallas Federal Reserve said Thursday.
"The dynamics of the Texas economy are pretty darn good," Robert Kaplan said during his keynote conversation at the Texas Business Leadership Council's fall meeting.
Harvey would cost the state between $75 billion and $100 billion, he said, and the state is expected to temporarily lose between 55,000 and 75,000 jobs in the areas affected by the natural disaster. But Kaplan said he expects those jobs to return as recovery continues, leaving intact the Dallas Federal Reserve's 2.6 percent job growth forecast.
Kaplan carefully avoided politics in his speech but stressed the importance of NAFTA to Texas' economy. His words came just days after renegotiation talks on the North American Free Trade Agreement ended with all sides agreeing to continue the discussion in 2018 after reaching an impasse.
"The trade relation with Mexico has been critical to Texas," Kaplan said, adding that Mexico is the state's top trade partner and that seeing the United States, Mexico and Canada as a regional bloc is beneficial to the country's economy.
"It is our best judgment that those relationships, which have taken many years to build, have allowed U.S. companies to stay here, be competitive, add jobs," he said. "If we didn't have that trade relationship with Mexico, it's our best judgment at the Dallas fed that we would lose some of those businesses and some of those jobs, most likely to Asia."
Kaplan also tread lightly on the subject of immigration, pointing to immigrant integration as a way to replenish and grow the workforce.
"You have to recognize that we have a workforce growth population challenge already," he said, "and that's the context with which we should be having this discussion."