The Federal Reserve Bank of Dallas announced on April 3 that Texas employment is expected to increase by 1.9 percent in 2026, according to its latest Texas Employment Forecast. The forecast comes with an 80 percent confidence band ranging from a low of 1.1 percent to a high of 2.7 percent.
The new projection marks an upward revision from the previous month’s estimate, suggesting stronger job growth ahead for the state. The forecast draws on four models incorporating projected national gross domestic product, oil futures prices, and both Texas and U.S. leading indexes.
Luis Torres, senior business economist at the Dallas Fed, said, “Texas employment growth strengthened notably in December and January, contributing to an increase in the employment forecast for 2026.” Torres added: “However, our expectations are for Texas employment growth in 2026 to be more in line with the lower end of the confidence band at 1.1 percent given several headwinds. Declining immigration is constraining labor supply, higher productivity is suppressing labor demand, business activity captured by our Texas Business Outlook Surveys recently moderated, and geopolitical uncertainty is elevated. High oil prices, meanwhile, are expected to boost state economic activity only if they are sustained.”
According to the report released by the Dallas Fed, approximately 278,400 jobs are projected to be added across Texas this year with total employment reaching about 14.6 million by December 2026. In January alone, annualized job growth was recorded at 2.3 percent; December’s figure was revised up to show a gain of 2.2 percent.
Unemployment trends varied across major metropolitan areas during January: Austin–Round Rock and San Antonio–New Braunfels saw increases in their unemployment rates based on seasonally adjusted figures from the Dallas Fed; Brownsville–Harlingen experienced a decline; while rates remained unchanged in Dallas–Plano–Irving, El Paso, Fort Worth–Arlington and Houston–The Woodlands–Sugar Land regions.
Statewide unemployment held steady at a rate of 4.3 percent during January.
