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Relatively high oil prices and the data center\u00a0buildout in the state are providing a boost to\u00a0Texas’ economic activity and job growth, Luis Torres, a senior economist at the Dallas Fed says.<\/p>\n
David Goldman\/The Associated Press<\/p>\n
Early this year, on the heels of a rough 2025<\/a>, researchers at the Dallas Fed projected that in 2026 the state would add jobs at a rate of just over 1% \u2014 or roughly half of Texas\u2019 traditional growth rate.\u00a0<\/p>\n But more than halfway through the year things are looking up: The latest projection from the bank\u2019s modeling system, released late last week, shows Texas employment is now on pace to expand this year by 2%, in line with Texas\u2019 long-run average.\u00a0<\/p>\n \u201cTexas job growth has been surprisingly strong in light of labor supply constraints,\u201d Luis Torres, a senior economist at the bank, said in a statement. \u201cThe data center buildout and relatively high oil prices continue to provide a boost to state economic activity and job growth.\u201d\u00a0<\/p>\n Article continues below this ad<\/p>\n The rosier full-year projection comes on the back of robust June jobs numbers: For the month, Texas added over 42,000 jobs, representing an employment growth rate of an annualized 3.5%, according to the bank\u2019s figures \u2014 the highest monthly increase in nearly two years. \u00a0\u00a0<\/p>\n The jobs gains came largely from professional business services, construction and trade and transportation, which far outweighed losses in education, health services and government. Leisure and hospitality also saw a bump, which Torres attributed to increased activity from the World Cup. While the tournament was widely expected to provide a short-term boost to the sector \u2014 including in soccer-mad\u00a0D-FW \u2014 analysts have also stressed that its long-term economic impact was likely to be minimal<\/a>.\u00a0<\/p>\n \u201cIt\u2019s a modest bump,\u201d Barbara Denham, an economist at Oxford Economics who authored a report on the tournament\u2019s economic impact, previously told The Dallas Morning News<\/a>. \u201cIt\u2019s not as significant as people think,\u201d she added, \u201cbecause people come for the games, spend a lot of money, then they leave.\u201d\u00a0<\/p>\n Greater Austin notched the highest monthly growth rate, at 5.8%, while greater Fort Worth added jobs at a rate of 3.9% and greater Dallas added jobs at a rate of 3.7%. Houston saw slower growth, while San Antonio reported a net decline.\u00a0<\/p>\n The Dallas Fed also revised May jobs gains upward slightly, to 1.3%. Except for February, when job growth in the state was nearly flat, throughout 2026 Texas has mostly posted solid jobs gains, including a 3.4% growth rate in March and 2.2% growth rate in April, according to the Dallas Fed\u2019s latest figures. \u00a0<\/p>\n Article continues below this ad<\/p>\n That\u2019s a marked change from 2025, when Texas experienced net job losses for several months and other months of nearly flat growth. After revisions, the state ended up with 0.7% jobs growth for the year, down from 1.7% in 2024 and 2.3% in 2023. Economists attributed the slowdown<\/a> to widespread macroeconomic uncertainty, including from the Trump administration\u2019s tariffs and flaring tensions in the Middle East; the administration\u2019s immigration crackdown, which dramatically reduced Texas\u2019 labor supply; and the state\u2019s struggling oil and gas industry.\u00a0<\/p>\n This year, the state\u2019s economy has proven surprisingly resilient even amid the war in Iran and continued labor supply issues. Torres and other economists have cited Texas\u2019 AI construction boom as well as its strong overall business climate, which continues to attract both companies and residents, particularly to D-FW.\u00a0<\/p>\n<\/p>\n