Dallas Fed: Texas employment forecast holds steady

DALLAS—The Texas Employment Forecast released by the Federal Reserve Bank of Dallas indicates jobs will increase 1.8 percent in 2026, with an 80 percent confidence band of 1.2 to 2.4 percent.

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 growth decelerated in May, and state year-to-date job growth remains at 1.6 percent, below its long-run average of 2 percent,” said Luis Torres, Dallas Fed senior business economist.

“That said, Texas job growth has been stronger than expected in light of immigration policies constraining labor supply and higher productivity suppressing labor demand in certain sectors. Moreover, relatively high oil prices have bolstered state economic activity, driving job gains in the oil and gas sector. However, oil prices have recently retreated amid an agreement allowing the Strait of Hormuz to reopen, which may moderate those gains.”

Additional key takeaways from the latest Dallas Fed report:

• The forecast implies 264,300 jobs will be added in the state this year, and employment in December 2026 will be 14.6 million.
• Texas employment grew an annualized 1.2 percent in May, adding 14,400 jobs. April job growth was 2.2 percent, which was revised up.

In May, the unemployment rate, which takes into account changes in the total labor force along with other factors, increased in some metro areas including Brownsville-Harlingen and Corpus Christi, according to seasonally adjusted numbers from the Dallas Fed.

The rate decreased in Amarillo and Odessa.

The rate was unchanged in most of the major metros, including Austin-Round Rock, Dallas-Plano-Irving, and Houston-The Woodlands-Sugar Land.

The Texas statewide unemployment rate was unchanged at 4.3 percent in May.

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.

Media contact:

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