Texas Employment Forecast

The Texas Employment Forecast estimates jobs will increase 2.6 percent in 2024, 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 361,100 jobs will be added in the state this year, and employment in December 2024 will reach 14.4 million (Chart 1). Growth for the remainder of the year is expected to be 2.4 percent.

Texas employment grew an annualized 4.0 percent in April, with 45,800 jobs added, after increasing a revised 1.5 percent in March.

“Broad-based acceleration of job growth in April illustrates the resiliency of the labor market,” said Luis Torres, Dallas Fed senior business economist. “Education and health services employment led overall job growth followed closely by construction. The only sector to report job losses last month was oil and gas. Employment in Texas major metro areas rebounded in April with Dallas leading the pack.”

The Texas Leading Index increased for the sixth straight month in April. The three-month change was positive, led by an increase in the help-wanted index and a decrease in new unemployment claims (Chart 2). Gains in oil prices, average weekly hours worked and well permits also contributed to growth. Meanwhile, drags on the index included decreases in the U.S. leading index and the Texas Stock Index, and increases in the Texas value of the dollar.

Next release: June 21, 2024

Methodology

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/.