Texas Employment Forecast
May 21, 2021
Texas employment growth decelerated to a 1.3 percent annualized rate in April after increasing by a revised 12.3 percent in March. The Texas Leading Index increased at a record pace this month, suggesting an acceleration in growth over the second half of the year.
Using a top-down model based on national forecasts, COVID-19 hospitalizations and oil futures prices, we estimate that job growth will increase by 6.6 percent in 2021—unchanged from last month’s estimate—with an 80 percent confidence band of 5.6 to 7.6 percent. Based on the forecast, 816,000 jobs will be added in the state this year, and employment in December 2021 will be 13.2 million (Chart 1).
“Job growth moderated in April after March’s very strong pace,” said Christopher Slijk, Dallas Fed associate economist. “While mobility has plateaued after rebounding strongly from Winter Storm Uri, COVID-19 cases and hospitalizations continue to trend down. Job gains were mixed across industries this month, with jobs in goods-producing industries pulling back from recent highs, while leisure and hospitality and professional services led overall growth in the service sector.”
The Texas Leading Index continued to increase in April, surging at its fastest one-month pace since the 1980s (Chart 2). Gains in the index were led by a sharp decline in initial claims for unemployment, while the other labor market indicators of help-wanted advertising and average weekly hours worked in manufacturing were also positive contributors. Increases in the U.S. leading index and stock prices of Texas-based companies, and a decline in the Texas export-weighted value of the dollar, also bolstered the index. Energy indicators were mixed, with well permits increasing, but oil prices declining slightly.
Next release: June 18, 2021
The Dallas Fed Texas Employment Forecast projects job growth for the calendar year and is estimated as the 12-month change in payroll employment from December to December.
Due to the rapid onset of the COVID-19 pandemic, the forecasting model used in this release of the Dallas Fed Texas Employment Forecast differs from the model used historically. In this case, payroll employment is estimated based on expectations for U.S. GDP growth for 2021, an estimate of direct COVID-19 impacts from March to May 2020, projected hospitalizations in Texas for COVID-19, and expected prices of West Texas Intermediate crude oil based on the futures curve.
For additional details see dallasfed.org/research/forecast/