Dallas Fed: Texas employment forecast strengthens

April 03, 2026

DALLAS-The Texas Employment Forecast released by the Federal Reserve Bank of Dallas indicates jobs will increase 1.9 percent in 2026, with an 80 percent confidence band of 1.1 to 2.7 percent.

That would be an increase from the previous month's forecast.

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.

"Texas employment growth strengthened notably in December and January, contributing to an increase in the employment forecast for 2026," said Luis Torres, Dallas Fed senior business economist. "However, our expectations are for Texas employment growth in 2026 to be more in line with the lower end of the confidence band at 1.1 percent given several headwinds. Declining immigration is constraining labor supply, higher productivity is suppressing labor demand, business activity captured by our Texas Business Outlook Surveys recently moderated, and geopolitical uncertainty is elevated. High oil prices, meanwhile, are expected to boost state economic activity only if they are sustained."

Additional key takeaways from the latest Dallas Fed report:

• The forecast suggests 278,400 jobs will be added in the state this year, and employment in December 2026 will be 14.6 million.
• Texas employment grew an annualized 2.3 percent in January, while December job growth was 2.2 percent, which was revised up.

In January, the unemployment rate, which takes into account changes in the total labor force along with other factors, increased in Austin-Round Rock and San Antonio-New Braunfels, according to seasonally adjusted numbers from the Dallas Fed.

The rate declined in Brownsville-Harlingen.

And the rate was unchanged in Dallas-Plano-Irving, El Paso, Fort Worth-Arlington, and Houston-The Woodlands-Sugar Land.

The Texas statewide unemployment rate was unchanged at 4.3 percent in January.

Find out more about the Texas Employment Forecast, plus additional information on seasonally adjusted and benchmarked Texas jobs data and metro unemployment rates.

For additional economic information on Texas metros, visit At the Heart of Texas.