Texas Employment Forecast

The Texas Employment Forecast indicates jobs will increase 1.5 percent in 2025, with an 80 percent confidence band of 0.8 to 2.2 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 212,200 jobs will be added in Texas this year, and employment in December 2025 will be 14.4 million (Chart 1).

Texas employment grew an annualized 1.4 percent in March, adding 16,600 jobs. Meanwhile, February employment was revised up to 2.4 percent growth.

“Job growth slowed in March due to declines in oil and gas, leisure, manufacturing, and professional and business services jobs,” said Luis Torres, Dallas Fed senior business economist. “In contrast, education and health, construction, and other services, which include repair and maintenance and personal care jobs, registered strong employment gains,” he added.

The Texas Leading Index fell during the first quarter (Chart 2). Most of the index components declined. A significant negative contributor was an increase in new unemployment claims followed by decreases in the U.S. leading index, well permits, the Texas stock index and the real oil price. Increases in average weekly hours and the help wanted index, and a decrease in the Texas value of the dollar pushed the index up.

Next release: May 16, 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/.