Texas Job Growth Hits a Pause in 2025

Texas, known for its robust job market, is experiencing a slowdown. In 2025, the state's job growth is expected to be nearly flat, according to the Federal Reserve Bank of Dallas. This is a significant change from Texas' usual strong job growth. The Dallas Fed's forecast uses several models to predict job growth. These models consider things like national economic growth, oil prices, and other economic indicators. The forecast suggests that Texas' job growth rate will be around zero in 2025. This is a big deal because Texas has been adding jobs at a rate of around 2% annually for a long time. The Texas Workforce Commission, however, has a slightly different view. They reported a 1% year-over-year job growth rate as of November 2025. But this data doesn't account for revisions from the first half of the year, so it might change. The Dallas Fed's forecast isn't all bad news. The statewide unemployment rate is expected to stay at 4. 2%, the same as the end of 2024. Major metro areas like Dallas-Fort Worth also saw no increase in unemployment rates. Additionally, Texas' economic productivity, as measured by GDP, saw a small boost. This is likely due to more technological integration, like artificial intelligence.But the halt in job growth is still a big change for Texas. The state has been adding jobs for years, while also experiencing a population boom. From the end of 2021 to the end of 2024, Texas added more than one million jobs, bringing the total to over 14 million. The Fed's forecast suggests that Texas has now reached 14. 2 million jobs, with a net loss of 2, 200 jobs in 2024. Much of the slowdown is due to the oil and gas industry, which has been shedding workers due to low oil prices and other uncertainties. Major energy companies like Chevron, Exxon Mobil, and ConocoPhillips have announced job cuts in the thousands. Additionally, the Trump administration's immigration crackdown is affecting Texas' labor supply. Lingering uncertainty around tariffs and other macroeconomic factors are also weighing on Texas employers. On the bright side, Texas has seen job growth in the healthcare sector and construction industry. This is partly due to the state's ongoing data center boom. In recent years, Texas has outpaced the national economy, with North Texas emerging as one of the country's most booming metro areas. However, it's unclear what the forecast might mean for the near future. The absence of a spike in unemployment claims is reassuring. An energy sector recovery or other factors could push Texas back toward its traditional 2% growth rate. The Texas economy still benefits from low regulation, a pro-business environment, no state income tax, and low taxes. But there are also headwinds to consider.