Texas Employment Forecast

The Texas Employment Forecast indicates jobs will increase 2.2 percent (304,200 jobs added) in 2024, with an 80 percent confidence band of 1.5 to 2.9 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 that job growth will be slightly above the state’s long-term average, and employment in December 2024 will reach 14.4 million (Chart 1).

Texas employment grew 2.0 percent in January, with 23,500 jobs added, and December employment growth was revised up to 2.4 percent.

“Texas employment growth seems to be returning to its long-term growth rate,” said Luis Torres, Dallas Fed senior business economist. “January job growth slowed in part due to moderating gains in the state’s largest employment sector—trade, transportation and utilities—and partly due to steep employment losses in the oil and gas sector. Employment in the other services sector led growth, followed by financial activities, education and health services, and manufacturing. In addition to energy employment losses, job declines were seen in construction and high-tech (information) services in January.”

With the release of the January data, the Texas Workforce Commission included its annual benchmark, which resulted in a downward revision for 2023 employment growth from 3.1 percent to 2.6 percent.

The Texas Leading Index increased 1.9 percent over the three months through January 2024 (Chart 2). The majority of the index components were positive contributors, including declines in new unemployment claims and the Texas value of the dollar, and increases in the Texas help-wanted index, the Texas Stock Index and well permits. In contrast, decreases in average weekly hours, the real price of West Texas Intermediate oil and the U.S. leading index dragged on the index.

Next release: March 22, 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/.