Texas Employment Forecast

June 17, 2022

The Texas Employment Forecast estimates that jobs will increase 4.0 percent in 2022, with an 80 percent confidence band of 3.3 to 4.7 percent. The forecast is based on projected national GDP, COVID-19 hospitalizations and oil futures prices. This estimate is higher than the previous projection of 3.7 percent. The forecast suggests that 522,700 jobs will be added in the state this year, and employment in December 2022 will be 13.6 million (Chart 1).

Texas employment grew an annualized 6.2 percent in May after increasing a revised 5.2 percent in April.

“Texas employment accelerated in May to its fastest pace in three months,” said Christopher Slijk, Dallas Fed associate economist. “Growth remained broad-based across goods-producing and private service-providing industries, with construction and leisure and hospitality leading the overall expansion. However, softness in some leading indicators suggests that job growth will moderate in the second half of the year.”

Despite strong overall job gains, the Texas Leading Index fell for a second month in May (Chart 2). Most of the index components were negative, led by an increase in the Texas value of the dollar, which weakens the competitiveness of Texas exports. An increase in new claims for unemployment benefits and declines in both average hours worked in manufacturing and the U.S. leading index were also drags on the index. Energy indicators were positive contributors, with oil prices and drilling permits for oil and gas wells up modestly.

Next release: July 22, 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/.