The Federal Reserve Bank of Dallas forecasts Texas employment will grow just 1.2% in 2026, a sharp deceleration from the state's long-run average of 2%. The bank projects the state will add roughly 173,600 jobs this year, pushing total employment past 14.5 million by December, with an 80% confidence band of 0.8% to 1.6%. Dallas Fed senior business economist Luis Torres attributed the slowdown to labor supply constraints rather than weaker demand, noting year-to-date job growth of just 1.0% even after August added 18,500 jobs at an annualized 1.6% pace. August gains were led by professional and business services, construction, government, manufacturing and leisure and hospitality, while oil and gas employment was flat and other services and information posted losses. The next Dallas Fed employment update is due Oct. 16.
