Dallas Fed: Texas employment forecast softens further

DALLAS—The Texas Employment Forecast released by the Federal Reserve Bank of Dallas indicates jobs will increase 1.2 percent in 2026, with an 80 percent confidence band of 0.8 to 1.6 percent.

This marks a decrease from the previous month’s forecast due to first-quarter benchmark revisions accounting for most of the decline in the 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 increased in August, bringing year-to-date job growth to 1.0 percent—below the state’s long-run average of 2 percent,” said Luis Torres, Dallas Fed senior business economist. “First-quarter benchmark revisions lowered the state’s year-to-date employment growth to a pace more consistent with labor supply constraints.”

Additional key takeaways from the latest Dallas Fed report:

• The forecast suggests 173,600 jobs will be added in the state this year, and employment in December 2026 will be 14.5 million.
• Texas employment increased by an annualized 1.6 percent in August. Employment for July declined by 0.1 percent.

In August, 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, El Paso, Fort Worth–Arlington, Houston–The Woodlands–Sugar Land, and San Antonio–New Braunfels, according to seasonally adjusted numbers from the Dallas Fed.

The Texas statewide unemployment rate decreased to 4.4 percent in August.

Read the full report for additional information about the Texas Employment Forecast, plus seasonally adjusted and benchmarked Texas jobs data and metro unemployment rates: Texas Employment Forecast - Dallasfed.org

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