Back on track? Texas employment growth will return to long-term norm this year, Dallas Fed projects
Texas employment growth is back on track. Earlier this year, the Dallas Fed projected that job gains in the state would slow to half of the long-term norm following a difficult 2025. New data shows that the state is on pace to expand employment by 2% this year, which aligns with historical averages.
Economic momentum is clear. In June alone, Texas added more than 42,000 jobs. This 3.5% annualized growth rate stands as the strongest monthly performance for the state in nearly two years. The professional business services, construction, and transportation sectors drove these gains, helping to offset declines in government and education.
Regional data highlights specific areas of strength. Greater Austin led the state with a 5.8% monthly growth rate, while Dallas and Fort Worth posted solid gains of 3.7% and 3.9% respectively. Economists point to a surge in data center construction and the resilience of the local business climate as primary drivers of this rebound.
While 2025 was defined by flat growth and net job losses, 2026 shows a different trend. Despite ongoing concerns regarding labor supply and global market volatility, the state continues to attract capital and talent. The Dallas Fed model, which pulls from data on GDP projections and oil prices, indicates that these positive conditions are likely to persist through the remainder of the year.