Texas Job Growth Slows in June, Leading Index Declines
Texas experienced a broad-based decline in job growth during June, with notable cuts in the oil and gas and professional business services sectors. The only sectors that saw job additions were facts services, education and health, and government. Employment also decreased across most major Texas metropolitan areas, with San Antonio being the sole exception.
The Texas Leading Index, a key indicator of future economic activity, has been on a downward trend for the three months leading up too June. This decline is attributed to a combination of factors, including a drop in the U.S. leading index and the Texas Stock Index. Further contributing to the downturn were decreases in well permits, average weekly hours, and real oil prices, alongside an increase in new unemployment claims. The only positive contributor to the index was a decline in the Texas value of the dollar.
The Dallas Fed’s Texas Employment Forecast projects job growth for the calendar year, measured as the 12-month change in payroll employment from December to December. The forecast is derived from an average of four models. Three of these models are vector autoregressions that analyze Texas payroll employment in relation to lagged West Texas Intermediate (WTI) oil prices, the U.S. leading index, and the Texas Leading Index. The fourth model is an autoregressive distributed lag model that regresses payroll employment on lagged payroll employment, current and lagged U.S. GDP growth and WTI oil prices,and Texas COVID-19 hospitalizations up to March 2023. This model also incorporates forecasts of U.S. GDP growth from Blue Chip Economic Indicators and WTI oil price futures. All models include four COVID-19 dummy variables to account for the period from March to June 2020.
For further details on the methodology, visit dallasfed.org/research/forecast/.
The next release of the Texas Employment Forecast is scheduled for August 15, 2025.
for inquiries regarding the Texas Employment Forecast, please contact Jesus Caรฑas at jesus.canas@dal.frb.org.