Texas Employment Forecast

May 20, 2022

The Texas Employment Forecast estimates that jobs will increase 3.7 percent in 2022, with an 80 percent confidence band of 2.9 to 4.5 percent. The forecast is based on projected national GDP, COVID-19 hospitalizations and oil futures prices. This estimate is up from the previous projection of 3.3 percent. The forecast suggests that 476,600 jobs will be added in the state this year, and employment in December 2022 will be 13.5 million (Chart 1).

Texas employment grew an annualized 5.7 percent in April after increasing a revised 2.7 percent in March. The Texas Leading Index declined in April after seven consecutive months of increases.

“Employment growth accelerated in April, with broad-based gains across goods-producing and service-providing industries,” said Christopher Slijk, Dallas Fed associate economist. “Energy employment led overall job growth, buoyed by higher oil prices in recent months, while sectors highly impacted by supply-chain disruptions, such as manufacturing and trade and transportation services, saw a more subdued expansion.”

Despite strong overall job gains, the Texas Leading Index declined in April (Chart 2). Most of the index components were negative, with a drop in help-wanted advertising leading overall declines. Weakness in equity prices of Texas-based companies and an increase in the Texas value of the dollar were also significant drags on the index. A fall in new unemployment claims and an increase in permits for drilling oil and gas wells were the sole positive contributors to the index.

Next release: June 17, 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/.