Texas Employment Forecast

The Texas Employment Forecast indicates jobs will increase 1.3 percent in 2025, with an 80 percent confidence band of 1.0 to 1.6 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. The forecast implies 180,400 jobs will be added in Texas this year, and employment in December 2025 will be 14.4 million (Chart 1). Growth for the remainder of the year is expected to be 1.5 percent.

Texas employment rose an annualized 3.2 percent in August, adding 38,000 jobs. Additionally, July employment growth was revised down to 0.4 percent from 0.9 percent.

“Employment growth accelerated in August, bringing year-to-date job growth to 1.2 percent, which is still below Texas’ long-term trend of 2.0 percent. Seasonal factors related to the beginning of the school year could be affecting the August numbers. One or two more months of data may be needed to confirm that a reacceleration of job growth has occurred,” said Luis Torres, Dallas Fed senior business economist. “Gains in employment were led by leisure and hospitality and health services jobs. Trade and transportation, government, and professional and business services jobs also registered strong gains. Manufacturing, financial services and other services recorded job losses,” he added.

The Texas Leading Index was unchanged over the three months through August (Chart 2). Changes in the components were mixed; increases in the help-wanted index, Texas stock index, real oil price and decreases in the Texas value of the dollar were positive contributors. Higher jobless claims and declines in average weekly hours, well permits and the U.S. leading index dragged on the index.

Next release: October 17, 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/.