The downtown skyline is seen through windows at the Kay Bailey Hutchison Convention Center on Monday, Feb. 5, 2024, in Dallas.
Smiley N. Pool/Staff Photographer
Dallas’ economy appears to be surging, yet another metric is seemingly heading in the wrong direction: Average hourly earnings for Dallas private sector workers have dropped in recent months, according to data published this summer by the Dallas Fed, even as the Texas and national averages have risen. Wages are also up in Fort Worth.
At least for now, the seemingly negative Dallas indicator isn’t actually a cause for concern, said Dallas Fed labor economist Pia Orrenius. “Sometimes it’s just an artifact of which sectors are growing versus not,” Orrenius told The Dallas Morning News. “I think it’s too soon to say anything ominous.”
The local earnings data was sourced from the Bureau of Labor Statistics and Texas Workforce figures and was published by the Dallas Fed in late July as part of the regional bank’s latest bimonthly economic indicators report for metro Dallas.
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On the whole, that report, which included data through June, was overwhelmingly positive, showing that Dallas has continued to add jobs while unemployment has been stable. In June, the Dallas economy added jobs at an annualized rate of 3.7%, up from 1.3% in May. June unemployment was 4.3%, unchanged from May.
Dallas’ monthly jobs growth figure outpaced both the Texas and national figures — as it has continuously since 2020 — while Dallas’ unemployment rate was in line with the state and national figures. Texas posted a June unemployment rate of 4.4%, while the U.S. rate was 4.2%.
The report also showed that local housing demand strengthened, with existing-home sales up 1.3% in June and 3.7% year-over-year — a figure that was lower than Texas’ home sales increase but higher than the national bump.
“It’s been a solid, robust year so far for Dallas,” said Orrenius.
Economic growth has been especially notable because economists generally expected headwinds coming into the year, particularly from the Trump administration’s tariff policies and immigration crackdown, which has limited Texas’ labor supply. Instead, both the Texas and Dallas economies have expanded at rates near the state’s historical 2% long-term employment growth average: Texas employment, according to the Dallas Fed’s latest data, has grown year-to-date by 1.6%, while metro Dallas saw annualized job growth of 1.8% from March through June, according to the bank’s report. Researchers chalk up much of the unexpected growth to the broader artificial intelligence boom.
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“If you look at the construction part, it’s contributing a lot of jobs,” Luis Torres, an economist based at the Dallas Fed’s San Antonio branch, told The News earlier this summer. “And I think a lot of those construction jobs are AI, but overall the economy continues to grow, to chug on, so it’s interesting to see that.”
The most recent Dallas earnings data, though, showed movement in the opposite direction: In June, the local average private sector hourly wage was $37.05, down from $37.30 in May. Year over year, metro Dallas earnings were up just 0.5%.
Dallas’ June average was still higher than the state average — Texas workers earned an hourly average wage of $35.63 — but dipped below the national average, which came in at $37.64. That’s somewhat unusual: Since 2012, according to the Dallas Fed data, Dallas’ average hourly earnings have mostly been higher than the national average, although local wages also dipped below national averages in 2023 and 2024.
And while Dallas’ year-over-year wages were virtually flat, both the state and national averages have been increasing at a faster clip, with Texas year-over-year earnings rising by 2.7% and national year-over-year earnings rising by 3.5%. In Fort Worth, the Dallas Fed’s latest data, from May, showed an average hourly wage of $37.23, representing a 3.4% year-over-year increase.
Yet the Dallas wage data, while seemingly anemic, doesn’t necessarily indicate any meaningful negative trend, Orrenius emphasized. One reason is that regional data, because of a smaller sample size, tends to be less reliable than national data, so shorter-term trends should be taken with a grain of salt. Another is that many firms have been responding to the labor shortage by increasing employees’ hours — so it’s possible the overall metro hourly average is being dragged down even as some workers are making more money.
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And metro Dallas — even as it continues to attract highly-paid finance and tech workers — has also been adding jobs in lower-paying sectors such as leisure and hospitality and construction, Orrenius noted. Temp jobs have also been surging.
In that sense, Dallas’ flatter wage data could also be a product of a more mature local economy, Orrenius noted. Fort Worth, by contrast, has seen a more rapid hourly wage increase because that city has lately been transitioning from a lower-wage economy into a more diverse one.
“It doesn’t mean that people’s wages are being reduced,” Orrenius said. “It just means that the economy is adding jobs — really over the last year we [added] hardly any jobs in Dallas, but we’re adding jobs this year, and not in the high-wage sectors.”
Especially in a time of widespread anxiety over AI, including the technology’s impact on the white-collar workforce, that more diverse job composition can be a good thing, she added.