Houston’s economic patterns have largely followed the nation’s for the past three years. A broad view of Houston’s performance can be seen in the coincident index of economic activity. This index is based on employment, unemployment rates, real wages and real retail sales, and its movements should reflect the broad path of the local economy. Figure 1 shows the index and the slowdown that began in April 2000. Unlike the nation, which recovered from recession in late 2001 but then saw the recovery turn sluggish, Houston experienced declines that were more modest but that have lingered since early 2001.