The Federal Reserve Bank of Dallas announced on May 22 that the Texas Employment Forecast projects a 1.8 percent increase in jobs for 2026, with an 80 percent confidence band ranging from 1.2 to 2.4 percent.
The forecast is derived from an average of 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 slowed slightly in April, pushing down year-to-date growth to 1.5 percent.” Torres said the slower pace of job growth aligns with expectations that increases in 2026 will be near the lower end of the forecast’s confidence band at around 1.2 percent.
Torres identified two primary headwinds: immigration constraining labor supply and higher productivity suppressing labor demand in some sectors. He also said that “our Texas Business Outlook Surveys suggest heightened geopolitical uncertainty due to the Iran War is weighing on hiring and capital expenditure decisions.” However, he noted that high oil prices are expected to boost state economic activity if sustained.
According to Torres, “Job gains in April were strongest in professional and business services, followed by construction and trade and transportation services. However, leisure and hospitality, financial services, and manufacturing registered the biggest job losses.”
The latest report indicates approximately 253,000 jobs will be added statewide this year with December employment reaching about 14.6 million. Texas employment grew at an annualized rate of 1.6 percent in April; March job growth was revised down to 3.4 percent.
In April, seasonally adjusted numbers from the Dallas Fed show unemployment rates increased across major metro areas including Austin–Round Rock, Brownsville–Harlingen, Dallas–Plano–Irving, El Paso, Fort Worth–Arlington, Houston–The Woodlands–Sugar Land, and San Antonio–New Braunfels, while the statewide unemployment rate remained unchanged at 4.3 percent.
