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Dallas Fed: Texas adds 25,400 in January; state employment forecast rises to 3.3 percent for 2018

For Immediate Release: March 9, 2018

DALLAS—Texas added 25,400 jobs in January, according to seasonally adjusted and benchmarked payroll employment numbers released today by the Federal Reserve Bank of Dallas.

After implementing its annual benchmark revision for Texas, the Bureau of Labor Statistics (BLS) revised 2017 growth to 2.1 percent. That compares to 1.2 percent in 2016. December 2017 saw a slight upward revision to 0.7 percent, or 7,100 jobs.

Incorporating January employment growth of 2.5 percent and leading index data, the Texas Employment Forecast suggests jobs will grow 3.3 percent this year (December/December), with an 80 percent confidence band of 1.8 to 4.8 percent. This is up from the previous estimate of 2.8 percent. Based on the forecast, 407,900 jobs will be added in the state this year, and employment in December 2018 will be 12.8 million.

 “January growth, along with the continued rise in the Texas Leading Index, suggests a good start to 2018,” said Keith R. Phillips, Dallas Fed assistant vice president and senior economist. “Job growth is positive and broad based across most major industries. The oil and gas industry in particular continued to pick up after weakness in 2015 and 2016 and the beginnings of a recovery in 2017.”

Recent gains in the Dallas Fed’s Texas Leading Index suggest that job growth in the state will accelerate this year. The index increased strongly over the three months ending in January, rising 3.38 percent. All of the components increased with the exception of average weekly hours worked in manufacturing, which slipped slightly. The largest contributions to the rise in the index came from the Texas Stock Index, the U.S. leading index, the Texas help-wanted index and oil prices. The Texas value of the dollar, drilling well permits and initial claims for unemployment insurance all gave moderately positive contributions.

Unemployment rates increased in all nine major Texas metro areas in January, according to seasonally adjusted numbers from the Dallas Fed. Rates rose the most in McAllen–Edinburg–Mission, from an already high 6.8 to 7.3 percent, followed by the Dallas–Plano–Irving and El Paso areas.

The Dallas Fed improves BLS payroll employment estimates for Texas by incorporating preliminary benchmarks into the data in a more timely manner and by using a two-step seasonal-adjustment technique. Texas metropolitan-area unemployment rates from the BLS also are seasonally adjusted by the Dallas Fed.

The Dallas Fed releases its Texas Employment Forecast on a monthly basis in conjunction with the release of monthly Texas employment data. The forecast projects job growth for the calendar year and is estimated as the 12-month change in payroll employment from December to December.

For information on the methodology for the Bank’s Texas Employment Forecast, visit the Dallas Fed’s website.

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Media contact:
Jennifer Chamberlain
Federal Reserve Bank of Dallas
Phone: (214) 922-6748
E-mail: jennifer.chamberlain@dal.frb.org