Dallas Fed: Texas employment forecast weakens

DALLAS—The Texas Employment Forecast released by the Federal Reserve Bank of Dallas indicates jobs will increase 0.9 percent in 2026, with an 80 percent confidence band of 0.6 to 1.2 percent.

This marks a decrease 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 declined in September, slowing year-to-date job growth to 0.8 percent, well below the state's long-running average of 2 percent,” said Luis Torres, Dallas Fed senior business economist. “The moderation in job growth is consistent with current labor supply constraints that partly result from sharply lower immigration. Employment declined in most sectors, while manufacturing remained a bright spot supported by oil and gas activity, export growth and construction related to artificial intelligence expansion.”

Additional key takeaways from the latest Dallas Fed report:

• The forecast suggests 134,000 jobs will be added in the state this year, and employment in December 2026 will be 14.5 million.
• Texas employment declined by an annualized 1.6 percent in September. Employment for August increased by 2.3 percent, which was revised upward.

In September, the unemployment rate, which takes into account changes in the total labor force along with other factors, declined in Brownsville–Harlingen, El Paso, Fort Worth–Arlington–Grapevine, and Houston–Pasadena–The Woodlands, according to seasonally adjusted numbers from the Dallas Fed.

The rate was unchanged in Austin–Round Rock and Dallas–Plano–Irving.

The rate increased in San Antonio–New Braunfels.

The Texas statewide unemployment rate was unchanged at 4.4 percent in September.

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