Dallas Fed Forecasts Texas Job Growth at 1.2% for 2026
The Dallas Federal Reserve forecasts that Texas employment will grow by just 1.2% in 2026, adding approximately 173,600 jobs and pushing total state employment to around 14.5 million by December. This marks a significant slowdown from the state's historical pace of job growth. August saw an annualized increase of 1.6%, with gains led by professional services, construction, government, manufacturing, and leisure sectors. Dallas Fed senior economist Luis Torres attributed this deceleration to labor supply constraints rather than weaker demand for jobs. The slowdown has implications for the commercial real estate (CRE) market in Texas, as slower job growth could reduce tenant demand across office, industrial, and multifamily properties. Despite a broader economic slowdown, construction and manufacturing remain strong performers. The Dallas Fed's 80% confidence interval places expected annual employment gains between 0.8% and 1.6%. The Leading Index for Texas declined in the three months ending August due to lower oil prices and reduced average weekly hours but was partially offset by fewer unemployment claims and an uptick in well permits.