Texas Employment Forecast
May 19, 2023
The Texas Employment Forecast indicates that jobs will increase 2.6 percent in 2023, with an 80 percent confidence band of 2.0 to 3.2 percent. The forecast is based on an average of four models that include projected national GDP, oil futures prices and the Texas and U.S. leading indexes. The forecast suggests that 352,000 jobs will be added in the state this year, and employment in December 2023 will be 14.1 million (Chart 1). It implies growth for the rest of the year will be an annualized 2.0 percent.
Texas employment grew 2.8 percent month over month in April after an upward revision in March to 3.2 percent.
“By adding close to 32,000 jobs in April, Texas year-to-date job growth is a solid 3.7 percent as the labor market continues to demonstrate resiliency,” said Luis Torres, Dallas Fed senior business economist. “Strength in April was led by an increase in employment in information services, other services and leisure and hospitality. Construction jobs posted strong losses, while financial services jobs slightly declined.”
The Texas Leading Index decreased over the three months through April (Chart 2). Changes in the index components were mixed; declines in the U.S. leading index, well permits, help-wanted index and Texas stock index dragged on the index. In contrast, declines in new claims for unemployment benefits and the Texas value of the dollar, and increases in average weekly hours worked and the real price of West Texas Intermediate oil were positive contributors.
Next release: June 16, 2023
The Dallas Fed’s 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.
The forecast is based on the average of four models. Three models are vector autoregressions where Texas payroll employment is regressed on the lags of West Texas Intermediate (WTI) oil prices, the U.S. leading index and the Texas Leading Index, respectively. The fourth model is an autoregressive distributed lag model with regression of payroll employment on lags of payroll employment, current and lagged values of U.S. GDP growth and WTI oil prices, and Texas COVID-19 hospitalizations through March 2023. Forecasts of Texas payroll employment from this model also use as inputs forecasts of U.S. GDP growth from the Federal Reserve Bank of Dallas and WTI oil price futures. All models include four COVID-19 dummy variables (March–June 2020).
For additional details, see dallasfed.org/research/forecast/.
For more information about the Texas Employment Forecast, contact Luis Torres at email@example.com.