Texas job growth has moderated from its post-pandemic peak, but the state’s economic outlook for 2026 remains robust, according to projections from the Federal Reserve Bank of Dallas. The Dallas Fed is now projecting that Texas will add jobs at a rate of 1.8 percent in 2026, near the state’s long-term growth trend, as reported by the Dallas Morning News on June 25.
The moderation reflects a return to more sustainable growth levels after several years of rapid expansion. Texas has consistently outpaced the national average in job creation, driven by population growth, corporate relocations, and expansion in energy, technology, and manufacturing sectors. The 1.8 percent projection, while cooler than the peaks of 2023 and 2024, still represents healthy job creation in absolute terms for a state with a workforce of more than 14 million.
The Dallas Fed’s analysis identifies several sectors as key drivers of employment growth for the remainder of 2026. The energy sector continues to expand, supported by ExxonMobil’s official redomiciliation to Texas and ongoing investment in oil and gas production. Professional and business services, which include legal, accounting, and consulting firms, are also projected to grow as more corporate headquarters relocate to the state.
The technology sector remains a bright spot, particularly in the Dallas-Fort Worth and Austin metros. The launch of the Texas Stock Exchange and continued investment from companies like Goldman Sachs and Charles Schwab have bolstered the financial services segment. Manufacturing employment is benefiting from reshoring trends and investment in semiconductor fabrication facilities.
However, the report also flags challenges. Higher interest rates have slowed construction activity, particularly in residential real estate. Retail employment has softened as consumers moderate spending. And the state’s infrastructure, including roads, water systems, and the power grid, is under strain from rapid population growth.
The Dallas Fed’s outlook assumes continued population in-migration from other states, which has been a defining feature of Texas’s economic story. However, if housing costs in major Texas metros continue to rise, the affordability advantage that has attracted workers and companies from California and other high-cost states could narrow. For now, the state’s economic fundamentals remain strong, and the 2026 job growth projection places Texas among the top-performing large state economies in the nation.
