Hundreds of thousands of new jobs are predicted to be added in Texas in 2026, according to a new report from the Dallas Federal Reserve.
The Texas Employment Forecast, released on April 3, indicates jobs will increase by 1.9% this year, with an 80% confidence band of 1.1-2.7%. The Dallas Fed said the forecast is based on an average of four models that include the projected national gross domestic product (GDP), oil futures prices, and the leading indexes for both Texas and the United States.
“Texas employment growth strengthened notably in December and January, contributing to an increase in the employment forecast for 2026,” said Dallas Fed senior business economist Luis Torres in a statement. “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% 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.”
The forecast, according to the Dallas Fed, suggests that 278,400 jobs will be added this year, with employment reaching 14.6 million in December 2026. The Fed also reports that employment in Texas grew at an annualized 2.3% in January, while December job growth was 2.2%.
The statewide and national breakdown
Different parts of the Lone Star State saw unemployment rates shift in January, the Dallas Fed reports, based on seasonally adjusted numbers. The rate went up in the Austin and Round Rock area, along with San Antonio and New Braunfels. However, the unemployment rate declined in the Brownsville and Harlingen area. The rate was unchanged in the Dallas and Fort Worth metro, in El Paso, and in the Houston metro.
The statewide unemployment rate, overall, was unchanged in January at 4.3%.
The Dallas Fed’s report comes a month after CBS News reported the U.S. labor market shed 92,000 jobs in February, marking a sharp and unexpected setback after economists had predicted an increase in hiring. The nationwide employment rate ticked up to 4.4% then, up from 4.3% in January.
February marked the third time in the last several months that has shown job losses. A drop in hiring in the health care sector, recently a source of strong employment gains, dragged down job growth in February. That sector had, at the time, shed 28,000 jobs, which the Labor Department attributed to recent strike activity.
On April 3, CBS News shared that U.S. job growth rebounded in March, with the Department of Labor reporting that employers added 178,000 jobs. That growth beat consensus forecasts of 60,000 payroll gains. The health care sector saw 76,000 additions in March, which came after nurses returned to work following the strikes. The construction industry added 26,000 jobs, while the transportation and warehousing industry brought in 21,000 new jobs.
Federal employment continued to decline, falling by 18,000 per the Labor Department.