Texas job market was feeling DOGE’s pinch. Then tariffs hit.

HOUSTON – The Houston Chronicle reports the Texas job market was humming along. Even as first-quarter job cuts surpassed the tally from a year-earlier by more than 40%, the unemployment rate in Texas held steady over the past year at around 4.1%. Still, signs were emerging that policies imposed by the Trump administration were starting to take their toll. An analysis by outplacement firm Challenger, Gray and Christmas released last week found American companies slashed more than 275,000 jobs in March, a staggering 60% increase over February’s cuts and more than 200% greater than the 90,309 jobs lost during the same period a year earlier. Challenger data for Texas shows first-quarter job cuts in 2025 were more than 41% greater than the year-earlier period. Yet job growth outpaced losses to start the year.

“The job market has remained robust year to date for Texas,” Pia Orrenius, a vice president and labor economist at the Federal Reserve Bank of Dallas, said. “Our growth number is like 1.9%, which is right under trend growth, so we’ve actually seen a little bit of improvement in the first two months of the year relative to last year. But this is backward-looking data.” Of the nearly 17,500 jobs lost in the state during the first quarter, Challenger found, the services sector took the biggest hit, losing 8,242 jobs, up from 1,053 a year earlier. “In March, Orrenius said, “the Texas service sector outlook survey slowed revenue growth to zero. So there was no growth in March according to our survey.” The impact on the jobs market of the sweeping tariffs announced last week by President Donald Trump has yet to be felt, and their effect will depend in large part on how long they stay in place. Meantime, the impact of cuts across the federal government are rippling across the Texas economy. “Job cut announcements were dominated last month by Department of Government Efficiency plans to eliminate positions in the federal government. It would have otherwise been a fairly quiet month for layoffs,” Andrew Challenger, the firm’s senior vice president, said in the statement accompanying the report.