Dallas Fed: Texas employment forecast softens

DALLAS—The Texas Employment Forecast released by the Federal Reserve Bank of Dallas indicates jobs will increase 1.5 percent in 2025, with an 80 percent confidence band of 1.1 to 1.9 percent.

That is down from the 1.7 percent growth forecast last month.

The forecast is based on an average of four models that include projected national GDP, oil futures prices and the Texas and U.S. leading indexes.

“Employment growth seems to be softening and is on a slower growth trajectory for the second half of the year,” said Luis Torres, Dallas Fed senior business economist. “With employment growth decelerating, year-to-date job growth is 1.6 percent, below its long-term trend of 2.0 percent. Manufacturing and oil and gas employment are leading the slowdown in state employment after registering two straight months of contraction. Employment in education and health services, which had been growing at a solid pace, reversed course and fell in July. The remaining sectors recorded job gains. San Antonio led the pack among major Texas metro areas, while employment in Houston declined for a third straight month.”

Additional key takeaways from the latest Dallas Fed report:

• The forecast suggests 208,300 jobs will be added in the state this year, and employment in December 2025 will be 14.4 million.
• Texas employment increased by an annualized 0.9 percent in July after a decline of 1.6 percent in June, which was revised down.

The unemployment rate, which takes into account changes in the total labor force along with other factors, increased in each of the major Texas metros, including Austin–Round Rock, Brownsville–Harlingen, Dallas–Plano–Irving, El Paso, Fort Worth–Arlington, Houston–The Woodlands–Sugar Land, Laredo, and San Antonio–New Braunfels, according to seasonally adjusted numbers from the Dallas Fed. 

The Texas statewide unemployment rate was unchanged at 4.0 percent in July.

Find out more about the Texas Employment Forecast, plus additional information on seasonally adjusted and benchmarked Texas jobs data and metro unemployment rates.

-30-

Media contact:
Jon Prior
Federal Reserve Bank of Dallas
Phone: 214-922-6857
Email: jon.prior@dal.frb.org