Dallas Fed: Texas employment forecast softens for 2025

DALLAS — The Texas Employment Forecast released by the Federal Reserve Bank of Dallas indicates jobs will increase 1.6 percent in 2025, with an 80 percent confidence band of 0.8 to 2.4 percent.
Texas employment grew 1.7 percent in 2024 after rising 2.4 percent in 2023.
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.

“Job growth in 2024 was generally broad-based across sectors, with strong gains seen in oil and gas, financial services and construction. Growth slowed notably in trade and transportation, leisure and hospitality, and government,” said Jesús Cañas, Dallas Fed senior business economist. “Among major Texas metros, El Paso led employment expansion with 2.1 percent growth; among small metros, Beaumont–Port Arthur took the lead with 4.9 percent job growth.”

Additional key takeaways from the latest Dallas Fed report:

The forecast suggests 225,000 jobs will be added in the state this year, and employment in December 2025 will be 14.4 million. The state added 244,000 jobs last year.
Texas employment increased by an annualized 3.1 percent month over month in December, an increase from November’s growth of 0.9 percent.

The unemployment rate, which takes into account changes in the total labor force along with other factors, decreased in all of Texas’ major metros in December. This includes Austin–Round Rock, Brownsville–Harlingen, Dallas–Plano–Irving, El Paso, Fort Worth–Arlington, Houston–The Woodlands–Sugar Land, Laredo and San Antonio–New Braunfels, according to?seasonally adjusted numbers?from the Dallas Fed.

The Texas statewide unemployment rate was unchanged at 4.2 percent in December.

For more information visit dallasfed.org.