Dallas Fed: Texas employment forecast softens despite strong August job growth

News Releases

September 22, 2025

DALLAS-The Texas Employment Forecast released by the Federal Reserve Bank of Dallas indicates jobs will increase 1.3 percent in 2025, with an 80 percent confidence band of 1.0 to 1.6 percent.

That is down from the 1.5 percent growth forecasted last month, a downshift that is largely a result of benchmark revisions to first quarter employment data.

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.

"Employment growth accelerated in August bringing year-to-date job growth to 1.2 percent, which is still below Texas' long-term trend of 2.0 percent," said Luis Torres, Dallas Fed senior business economist. "Seasonal factors related to the beginning of the school year could be affecting the August numbers. One or two more months of data may be needed to confirm that a reacceleration of job growth has occurred. Gains in employment were led by leisure and hospitality and health services jobs. Trade and transportation, government, and professional and business services jobs also registered strong gains. Manufacturing, financial services and other services recorded job losses."

Additional key takeaways from the latest Dallas Fed report:

• The forecast implies 180,400 jobs will be added in the state this year, and employment in December 2025 will be 14.4 million.
• Texas employment increased by an annualized 3.2 percent in August after an increase of 0.4 percent in July, which was revised down.

The unemployment rate, which takes into account changes in the total labor force along with other factors, increased in each of the major Texas metros, including Austin-Round Rock, Brownsville-Harlingen, Dallas-Plano-Irving, El Paso, Fort Worth-Arlington, Houston-The Woodlands-Sugar Land, Laredo, and San Antonio-New Braunfels, according to seasonally adjusted numbers from the Dallas Fed.

The Texas statewide unemployment rate increased to 4.1 percent in August.

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

-30-

Media contact:
Jon Prior
Federal Reserve Bank of Dallas
Phone: 214-922-6857
Email: [email protected]