Texas Employment Forecast
September 15, 2023
The Texas Employment Forecast indicates that jobs will increase 2.9 percent in 2023, with an 80 percent confidence band of 2.6 to 3.3 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 399,600 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 2.1 percent.
Texas employment grew an annualized 1.1 percent month over month in August, adding 12,400 jobs, while July growth was revised down to 2.5 percent.
“Job growth slowed in August, and July growth was revised down, suggesting the labor market may finally be cooling off after registering such strong growth in the past two years,” said Luis Torres, Dallas Fed senior business economist. “Surprisingly, private sector job growth was near zero in August. Looking by sector, there were increases in oil and gas, leisure and hospitality, financial services, other services, manufacturing and government employment. Information services, education and health services, professional business services, trade and transportation, and construction reported job losses.”
The Texas Leading Index decreased over the three months through August (Chart 2). Changes in the index components were mixed; significant negative contributors were decreases in the help-wanted index and the U.S. leading index and higher new unemployment claims. In contrast, increases in the Texas stock index, the real price of West Texas Intermediate oil and well permits, and a decrease in the Texas value of the dollar pushed the index higher. Average hours worked did not register any change.
Next release: October 20, 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 Blue Chip Economic Indicators 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.