Texas Employment Forecast, June 21, 2024

The Texas Employment Forecast estimates that jobs will grow 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 and major Texas and US indices. The forecast suggests that 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 rest of the year is expected to be 2.1 percent.

Employment in Texas rose 2.8 percent in May, following a 3.4 percent increase in April, which was revised downward.

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

Texas’ main index fell in the three months to May (Chart 2). Most of the components fell, led by declines in the index sought for help, the Texas stock index and the main US index. The rise in the value of the dollar in Texas and new jobless claims, as well as lower oil prices, also weighed on the index. Meanwhile, the increase in well permits and average working hours contributed positively.

Next release: 19 July 2024

METHODOLOGY

The Dallas Fed’s Texas employment forecast forecasts 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 lags of West Texas Intermediate (WTI) oil prices, the US benchmark index, and the Texas benchmark index. The fourth model is an autoregressive distributed lag model by regressing payroll employment on payroll employment lags, actual and lagged values ​​of US GDP growth and WTI oil prices, and Texas COVID-19 hospitalizations through March 2023. The Texas payroll employment forecast from this model also uses US GDP growth forecasts from Blue Chip Economic Indicators and futures as input. of WTI oil price. All models include four dummy variables of COVID-19 (March–June 2020).

For additional details, see dallasfed.org/research/forecast/.