Dallas Fed: Texas employment forecast strengthens

DALLAS—The Texas Employment Forecast released by the Federal Reserve Bank of Dallas indicates jobs will increase 2.0 percent in 2026, with an 80 percent confidence band of 1.5 to 2.5 percent.

That would be an increase from the previous month’s forecast.

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 accelerated in June, pushing year-to-date job growth to 1.9 percent—close to its long-run average of 2 percent,” said Luis Torres, Dallas Fed senior business economist. “Texas job growth has been surprisingly strong in light of labor supply constraints. The data center buildout and relatively high oil prices continue to provide a boost to state economic activity and job growth.”

“Job gains in June were exceptionally strong in professional business services, driven by robust momentum in the staffing sector, as temporary help employment has been rising since March,” Torres added. “Additionally, leisure and hospitality registered strong job gains, likely due to World Cup-related activity. Construction and trade and transportation also logged employment increases. In contrast, education and health services and government registered job losses. Among major Texas metros, Austin posted the fastest growth at 5.8 percent, followed by Fort Worth at 3.9 percent, Dallas at 3.7 percent and Houston at 2.7 percent, while San Antonio reported a decline of 3.1 percent.”

Additional key takeaways from the latest Dallas Fed report:

• The forecast suggests 286,000 jobs will be added in the state this year, and employment in December 2026 will be 14.6 million.
• Texas employment grew an annualized 3.5 percent in June, while May job growth was 1.3 percent, which was revised up slightly.

In June, the unemployment rate, which takes into account changes in the total labor force along with other factors, increased in Austin–Round Rock, Fort Worth–Arlington, Houston–The Woodlands–Sugar Land, and San Antonio–New Braunfels, according to seasonally adjusted numbers from the Dallas Fed.

The rate declined in Brownsville–Harlingen.

The rate was unchanged in Dallas–Plano–Irving and El Paso.

The Texas statewide unemployment rate increased to 4.4 percent in June.

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