Texas Employment Forecast

April 15, 2022

The Texas Employment Forecast estimates that jobs will increase 3.3 percent in 2022, with an 80 percent confidence band of 2.5 to 4.1 percent. The forecast is based on projected national GDP, COVID-19 hospitalizations and oil futures prices. This estimate is slightly lower than the previous projection of 3.4 percent. The forecast suggests that 435,500 jobs will be added in the state this year, and employment in December 2022 will be 13.4 million (Chart 1).

Texas employment grew an annualized 2.3 percent in March after increasing a revised 9.4 percent in February. The Texas Leading Index surged in March, building on seven months of consecutive increases.

“March job growth slowed overall, as an acceleration in goods-producing sectors—particularly energy and manufacturing—was offset by a flattening out in most service sector industries,” said Christopher Slijk, Dallas Fed associate economist. “As headwinds from ongoing supply-chain constraints and labor market tightness continue, job growth through the remainder of the year will moderate from the 5.5 percent rate seen in the first quarter.”

The Texas Leading Index increased sharply in March (Chart 2). Most of the index components were positive, with steep declines in new claims for unemployment benefits and increases in help-wanted advertising leading overall growth. The only drag on growth in the index was a slight increase in the Texas trade-weighted value of the dollar, which makes international exports less competitive.

Next release: May 20, 2022

Methodology

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 2022, an estimate of direct COVID-19 impacts from March to June 2020, projected hospitalizations in Texas for COVID-19 from the Institute for Health and Metrics Evaluation, and expected prices of West Texas Intermediate crude oil based on the futures curve.

For additional details, see dallasfed.org/research/forecast/