Texas Employment Forecast

The Texas Employment Forecast estimates jobs will increase 2.2 percent in 2024, with an 80 percent confidence band of 2.0 to 2.4 percent. The forecast is based on an average of four models that include projected national gross domestic product, oil futures prices and the Texas and U.S. leading indexes. The forecast suggests 300,000 jobs will be added in the state this year, and employment in December 2024 will reach 14.3 million jobs (Chart 1). Growth for the remainder of the year is expected to be 2.4 percent.

Texas employment decreased an annualized 0.6 percent in October, and September was revised up to 3.7 percent growth. “Texas employment contracted as 6,600 jobs were lost in October. Losses were concentrated in private-sector services, particularly professional and business services, although some sectors expanded such as information and financial activities. Government and goods producing sectors also expanded,” said Jesus Canas, Dallas Fed senior business economist. “In the major metropolitan areas, employment grew in San Antonio, Austin and Fort Worth, while it fell in Houston and Dallas,” he added.

The Texas Leading Index fell during the three months through October (Chart 2). Changes in the index components were mixed; the increases in the help-wanted index and the decrease in new unemployment claims were positive contributors. However, the index was dragged down by decreases in average hours worked, the U.S. leading index, well permits, the real price of West Texas Intermediate oil and the increase in the Texas value of the dollar.

Next release: December 20, 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 for which 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. 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 forecasts of U.S. GDP growth from Blue Chip Economic Indicators and WTI oil price futures as inputs. All models include four COVID-19 dummy variables (March–June 2020).

For additional details, see dallasfed.org/research/forecast/.

Note

An update to the Texas Leading Index resulted in the employment forecast changing from 2.1 percent to 2.2 percent.