Texas Employment Forecast

March 25, 2022

The Texas Employment Forecast estimates that jobs will increase 3.4 percent in 2022, with an 80 percent confidence band of 2.6 to 4.2 percent. The forecast is based on projected national GDP, COVID-19 hospitalizations and oil futures prices. This forecast is higher than the previous estimate of 2.9 percent. The forecast suggests that 440,200 jobs will be added in the state this year, and employment in December 2022 will be 13.5 million (Chart 1).

Texas employment grew an annualized 8.9 percent in February after increasing a revised 5.0 percent in January. The Texas Leading Index rose again in February following six months of consecutive increases.

“February job growth accelerated sharply, with broad-based gains across most private sector industries,” said Christopher Slijk, Dallas Fed associate economist. “The outlook for growth in the first half has improved by about 1 percentage point. Recent increases in energy prices have bolstered the forecast; though burdensome for consumers, elevated energy prices are typically a net positive for Texas economic growth.”

Growth in the Texas Leading Index picked up in February after a weak January (Chart 2). The index was buoyed by steep declines in new claims for unemployment and continued increases in the oil price. Gains in the U.S. leading index and average weekly hours worked in manufacturing contributed slightly to growth as well, while declines in help-wanted advertising and the stock prices of Texas-based companies were moderate drags.

Next release: April 15, 2022

Methodology

The Dallas Fed 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.

Due to the rapid onset of the COVID-19 pandemic, the forecasting model used in this release of the Dallas Fed Texas Employment Forecast differs from the model used historically. In this case, payroll employment is estimated based on expectations for U.S. GDP growth for 2022, an estimate of direct COVID-19 impacts from March to June 2020, projected hospitalizations in Texas for COVID-19 from the Institute for Health and Metrics Evaluation, and expected prices of West Texas Intermediate crude oil based on the futures curve.

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