Texas Employment Forecast – Dallasfed.org

The Texas Employment Forecast estimates jobs will increase 2.4 percent in 2024, with an 80 percent confidence band of 1.9 to 2.9 percent. The forecast is based on an average of four models that include projected national GDP, oil futures prices and the Texas and U.S. leading indexes. The forecast suggests 333,400 jobs will be added in the state this year, and employment in December 2024 will reach 14.3 million (Chart 1). Growth for the remainder of the year is expected to be 2.1 percent.

Texas employment grew an annualized 2.8 percent in May after increasing 3.4 percent in April, which was revised downward.

“Texas employment continued to expand broadly in May with the state adding 32,700 jobs. This brings Texas year-to-date job growth to a solid 2.8 percent,” said Luis Torres, Dallas Fed senior business economist. “In May, leisure and hospitality and trade and transportation led overall job growth followed by construction and manufacturing. The only sectors posting job losses last month were oil and gas and information services. Employment gains in Texas major metro areas except for San Antonio decelerated somewhat in May.”

The Texas Leading Index decreased over the three months through May (Chart 2). The majority of the components declined, led by decreases in the help-wanted index, the Texas Stock Index and the U.S. leading index. Increases in the Texas value of the dollar and new unemployment claims, and decreases in oil prices, also weighed on the index. Meanwhile, increases in well permits and average hours worked contributed positively.

Next release: July 19, 2024

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/.