Texas Employment Forecast
October 21, 2022
The Texas Employment Forecast indicates that jobs will increase 4.4 percent in 2022, with an 80 percent confidence band of 3.9 to 4.8 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 4.2 percent. The forecast suggests that 571,000 jobs will be added in the state this year, and employment in December 2022 will be 13.7 million (Chart 1).
Texas employment growth increased to 4.3 percent in September after falling to zero in August.
“With the rebound in September employment, Texas year-to-date job growth is a solid 4.8 percent,” said Christopher Slijk, Dallas Fed associate economist. “Strength in September was led by an increase in leisure and hospitality, financial activities, and trade, transportation and utilities employment. Goods-producing sectors posted net declines, led by job losses in construction. Growth in the fourth quarter is expected to be 3.0 percent.”
The Texas Leading Index weakened sharply over the three months through September (Chart 2). The index components were nearly all negative, with weakness led by a steep decline in help-wanted advertising. A rise in new unemployment claims and energy indicators—particularly the fall in the West Texas Intermediate oil price—also dragged on the index, while an increase in the average weekly hours worked in manufacturing was a slight positive contributor. The weakness in the leading index suggests further slowing in job growth going into 2023.
Next release: November 18, 2022
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/p>
The Dallas Fed Texas Employment Forecast is based on the average of four models. Three models are VARs where Texas payroll employment is regressed on WTI oil prices, the US leading index and the Texas leading index, respectively. The fourth model is a regression of payroll employment on expectations for U.S. GDP growth and WTI oil prices, four COVID-19 dummy variables (March-June, 2020) and projected Texas COVID-19 hospitalizations from the Institute for Health and Metrics Evaluation
For additional details, see dallasfed.org/research/forecast/.
For more information about the Texas Employment Forecast, contact Christopher Slijk at email@example.com.