Texas Employment Forecast

The Texas Employment Forecast indicates jobs will increase 1.7 percent in 2025, with an 80 percent confidence band of 1.1 to 2.3 percent. The forecast is based on an average of four models that include projected U.S. gross domestic product, oil futures prices and the Texas and U.S. leading indexes. In addition, this forecast utilizes Texas employment data that have been adjusted to include anticipated downward revisions by the Bureau of Labor Statistics. The forecast implies 245,400 jobs will be added in Texas this year, and employment in December 2025 will be 14.4 million (Chart 1).

Texas employment rose an annualized 4.6 percent in April, adding 54,000 jobs. Meanwhile, March employment growth was unchanged at 1.4 percent.

“The broad-based acceleration of job growth in April was strong compared with soft growth in the first quarter,” said Luis Torres, Dallas Fed senior business economist. “Professional and business services led overall job growth followed by construction and manufacturing. The only sectors that lost jobs last month were information services and other services, which include repair and maintenance and personal care jobs. Employment growth in major Texas metro areas was led by San Antonio, El Paso and Austin,” he added.

The Texas Leading Index increased over the three months through April. (Chart 2). Despite most of the components declining, the increase in average weekly hours helped push up the index into positive territory. Other positive contributors were a decline in the Texas value of the dollar and an increase in well permits. Decreases in the Texas Stock Index, the real oil price, the help wanted index and the U.S. leading index, and increases in new unemployment claims weighed on the index.

Next release: June 20, 2025

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/.