Texas Employment Forecast

August 19, 2022

The Texas Employment Forecast estimates that jobs will increase 5.2 percent in 2022, with an 80 percent confidence band of 4.5 to 5.8 percent. The forecast is based on projected national GDP, COVID-19 hospitalizations and oil futures prices. This estimate is higher than last month’s projection of 4.5 percent. The forecast suggests that 674,200 jobs will be added in the state this year, and employment in December 2022 will be 13.7 million (Chart 1).

Texas employment grew an annualized 7.4 percent in July after increasing a revised 8.2 percent in June.

“Texas employment continued to grow at a very strong rate, only moderating slightly from June’s pace and bringing year-to-date job growth to a very robust 6.1 percent,” said Christopher Slijk, Dallas Fed associate economist. “Expansion in July continued to be broad based across industries and major metro areas, with Fort Worth and Austin leading growth in the state. However, we expect employment for the remainder of the year to decelerate to under 4 percent as forward-looking indicators for production and hiring point to a slowing state economy.”

The Texas Leading Index weakened over the three months through July (Chart 2). The index components were mostly negative, with weakness led by increases in new unemployment claims and the Texas value of the dollar. Declines in the U.S. leading index and average weekly hours worked in manufacturing also weighed on the index. Energy indicators were roughly neutral over this time frame, while an increase in help-wanted advertising contributed positively.

Next release: September 16, 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/.