Dallas Fed: Texas employment growth projected to increase in 2026
DALLAS—The Texas Employment Forecast released by the Federal Reserve Bank of Dallas indicates jobs will increase 1.1 percent in 2026, with an 80 percent confidence band of -0.5 to 2.7 percent.
Texas employment grew 0.1 percent in 2025 after rising 1.6 percent in 2024. The state added just 10,700 jobs last year.
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.
“Texas employment was essentially flat in 2025,” said Luis Torres, Dallas Fed senior business economist. “Higher productivity suppressed labor demand, and slower immigration constrained supply. In addition, employers were more cautious about hiring as a result of high policy uncertainty. Job losses were observed across several sectors, including energy, manufacturing, government, information and professional and business services. Meanwhile, there were job gains in construction, education and health services, financial activities, and trade and transportation services. Among major Texas metros, Austin posted the fastest growth at 0.9 percent while San Antonio experienced the steepest decline at 0.6 percent.”
Additional key takeaways from the latest Dallas Fed report:
- The forecast suggests 154,600 jobs will be added in the state this year, and employment in December 2026 will be 14.4 million.
- Texas employment grew an annualized 1.7 percent in December, while November employment decreased by 0.5 percent, which was revised down slightly.
In December, the unemployment rate, which takes into account changes in the total labor force along with other factors, declined in Austin–Round Rock, Brownsville–Harlingen, Dallas–Plano–Irving, Fort Worth–Arlington, Houston–The Woodlands–Sugar Land, and San Antonio–New Braunfels, according to seasonally adjusted numbers from the Dallas Fed.
The rate was unchanged in El Paso.
The Texas statewide unemployment rate increased slightly to 4.3 percent in December.
Find out more about the Texas Employment Forecast, plus additional information on seasonally adjusted and benchmarked Texas jobs data and metro unemployment rates.
For additional economic information on Texas metros, visit At the Heart of Texas.