Texas Employment Forecast

December job growth was 1.7 percent in Texas, according to employment data released today by the Texas Workforce Commission and early benchmarked by the Dallas Fed. Job growth in 2025 came in at 0.1 percent (10,700 jobs), below the state’s long-term average growth of 2.0 percent. Job losses were observed in 2025 across several sectors in Texas, with the largest declines in government, professional and business services and manufacturing. Job growth materialized in construction, education and health services and trade and transportation services. Of the major Texas metro areas, Austin led the pack with 0.9 percent growth, while San Antonio experienced the steepest decline at 0.6 percent. Last year’s job growth fell short of the original Dallas Fed forecast of 1.6 percent (with an 80 percent confidence band of 0.8 to 2.4 percent), due in part to higher productivity suppressing labor demand and less immigration constraining labor supply. The Texas unemployment rate ended the year at 4.3 percent.