The Federal Reserve Bank of Dallas announced on Apr. 17 that Texas employment is projected to grow by 1.4 percent in 2026, according to its latest Texas Employment Forecast. The forecast includes an 80 percent confidence band ranging from 0.7 to 2.1 percent and represents a decrease from the previous month’s projection.
The revised outlook suggests that job growth in Texas is slowing, which could affect workers and businesses across the state. The forecast draws on four models incorporating projected national gross domestic product, oil futures prices, and leading economic indicators for both Texas and the United States.
Luis Torres, senior business economist at the Dallas Fed, said: “Texas employment growth slowed sharply in February and year-to-date growth is now more aligned with earlier forecasts for 2026.” Torres added: “Given several headwinds, our expectations are for this year’s growth to come in at the lower end of the forecast’s confidence band, at around 1.0 percent. Declining immigration is constraining labor supply, and higher productivity is suppressing labor demand. Business activity captured by our Texas Business Outlook Surveys has recently moderated, and geopolitical uncertainty remains elevated. Meanwhile, high oil prices are expected to boost state economic activity only if they are sustained.”
According to the Dallas Fed report, about 205,500 jobs are expected to be added statewide this year with total employment reaching approximately 14.6 million by December 2026. In February alone, annualized job growth was measured at just 0.3 percent while January’s rate was revised down to a gain of only 1.1 percent.
Metro-level data show that unemployment rates decreased in Austin–Round Rock, Brownsville–Harlingen, Dallas–Plano–Irving, El Paso, Fort Worth–Arlington, and San Antonio–New Braunfels during February based on seasonally adjusted figures from the Dallas Fed; Houston–The Woodlands–Sugar Land saw no change during this period.
Statewide unemployment remained unchanged at a rate of 4.3 percent in February.
