Texas Employment Forecast

September 16, 2022

The Texas Employment Forecast estimates that jobs will increase 4.2 percent in 2022, with an 80 percent confidence band of 3.7 to 4.8 percent. The forecast is based on projected national GDP, COVID-19 hospitalizations and oil futures prices. This estimate is lower than last month’s projection of 5.2 percent. The forecast suggests that 553,500 jobs will be added in the state this year, and employment in December 2022 will be 13.6 million (Chart 1).

Texas employment growth flattened to zero in August after a revised reading of 7.6 percent in July.

“Texas employment growth slowed sharply, but despite August’s weak reading, year-to-date job growth remains a strong 4.9 percent,” said Christopher Slijk, Dallas Fed associate economist. “Weakness in August was led by a decline in employment in trade, transportation and utilities, along with declines in construction and professional and business services. Growth for the remainder of the year is expected to be around 3.0 percent, a significant deceleration relative to the first half of the year but still above the state’s historical trend.”

The Texas Leading Index weakened over the three months through August (Chart 2). The index components were mostly negative, with weakness led by increases in new claims for unemployment insurance. An increase in the Texas value of the dollar, which makes exports less competitive internationally, and weakness in the U.S. leading index also weighed significantly on the index. Energy indicators softened slightly over this time frame, while an increase in help-wanted advertising contributed positively.

Next release: October 21, 2022

Methodology

The Dallas Fed Texas Employment Forecast projects job growth for the calendar year and is estimated as the 12-month change in payroll employment from December to December.

Due to the rapid onset of the COVID-19 pandemic, the forecasting model used in this release of the Dallas Fed Texas Employment Forecast differs from the model used historically. In this case, payroll employment is estimated based on expectations for U.S. GDP growth for 2022, an estimate of direct COVID-19 impacts from March to June 2020, projected hospitalizations in Texas for COVID-19 from the Institute for Health and Metrics Evaluation, and expected prices of West Texas Intermediate crude oil based on the futures curve.

For additional details, see dallasfed.org/research/forecast/.