The Texas Employment Forecast estimates that jobs will increase 4.5 percent in 2022, with an 80 percent confidence band of 3.8 to 5.2 percent. The forecast is based on projected national GDP, COVID-19 hospitalizations and oil futures prices. This estimate is higher than the previous projection of 4.0 percent. The forecast suggests that 593,800 jobs will be added in the state this year, and employment in December 2022 will be 13.7 million (Chart 1).
Texas employment grew an annualized 7.3 percent in June after increasing a revised 5.6 percent in May.
“Texas employment accelerated in June, bringing job growth in the second quarter to a very robust 6.0 percent,” said Christopher Slijk, Dallas Fed associate economist. “Expansion in June was broad based, with only construction seeing a decline across private sector industries. Nevertheless, growth is expected to slow in the second half of the year to 3.4 percent as headwinds from a weaker U.S. outlook along with ongoing supply-chain and labor market challenges put downward pressure on economic growth in Texas.”
The Texas Leading Index declined in the second quarter (Chart 2). The index components were mostly negative, with increases in new unemployment claims and falling stock prices of Texas companies leading declines in the index. Increases in the Texas value of the dollar, which makes state exports more expensive internationally, and a decrease in the U.S. leading index spurred further weakness. Conversely, significant increases in help-wanted advertising and increases in oil prices and drilling permits for oil and gas wells were positive contributors to the index.
Next release: August 19, 2022
The Dallas Fed 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.
Due to the rapid onset of the COVID-19 pandemic, the forecasting model used in this release of the Dallas Fed Texas Employment Forecast differs from the model used historically. In this case, payroll employment is estimated based on expectations for U.S. GDP growth for 2022, an estimate of direct COVID-19 impacts from March to June 2020, projected hospitalizations in Texas for COVID-19 from the Institute for Health and Metrics Evaluation, and expected prices of West Texas Intermediate crude oil based on the futures curve.
For additional details, see dallasfed.org/research/forecast/.