Texas Employment Forecast

September 20, 2024

The Texas Employment Forecast estimates jobs will increase 2.2 percent in 2024, with an 80 percent confidence band of 1.9 to 2.5 percent. 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. The forecast suggests 307,900 jobs will be added in the state this year, and employment in December 2024 will reach 14.3 million (Chart 1). Growth for the remainder of the year is expected to be 2.2 percent.

Texas employment increased an annualized 7.3 percent in August after decreasing 1.7 percent in July (due to Hurricane Beryl), which was revised downward.

"After Hurricane Beryl's impact in July, Texas employment rebounded in August, gaining 83,200 jobs. Storms like Beryl typically have a transitory effect on employment, and the following month's employment rebounds as the economy recovers from the storm's damages," said Luis Torres, Dallas Fed senior business economist. "Gains were largely broad based across all sectors and were led by construction, manufacturing, financial activities, and leisure and hospitality. Houston, which bore the brunt of Beryl's force, gained 28,000 jobs. In addition, strong employment growth was observed in the other major metropolitan statistical areas, led by San Antonio and El Paso."

The Texas Leading Index slightly increased over the three months through August (Chart 2). Changes in the index components were mixed; increases in average hours worked, the Texas stock index, well permits and decreases in the Texas value of the dollar were positive contributors. In contrast, the index was dragged down by increases in new claims for unemployment and decreases in the U.S. leading index, help-wanted index and the real price of West Texas Intermediate oil.

Next release: October 18, 2024

Methodology

The Dallas Fed's 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.

The forecast is based on the average of four models. Three models are vector autoregressions for which Texas payroll employment is regressed on the lags of West Texas Intermediate (WTI) oil prices, the U.S. leading index and the Texas Leading Index. The fourth model is an autoregressive distributed lag model with regression of payroll employment on lags of payroll employment, current and lagged values of U.S. GDP growth and WTI oil prices, and Texas COVID-19 hospitalizations through March 2023. Forecasts of Texas payroll employment from this model also use forecasts of U.S. GDP growth from Blue Chip Economic Indicators and WTI oil price futures as inputs. All models include four COVID-19 dummy variables (March-June 2020).

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

Public link

Please use the above public link if you want to share this noodl on another website.