Texas labor market forecast 2026: what a lower outlook means for regional planning

Analysis | November 7, 2026

The Federal Reserve Bank of Dallas now expects Texas employment to grow 0.9% in 2026, with an 80% confidence band of 0.6% to 1.2%. The forecast, released October 19, implies about 134,000 jobs this year and December employment of 14.5 million. [1]

In July, the same forecast stood at 2.0%. [2]

For anyone planning a training program, a site or an incentive offer, that change raises a practical question: how should a region plan when the statewide outlook moves this much in three months?

How the 2026 forecast changed

The Dallas Fed updates its Texas Employment Forecast each month as new data arrives. This year’s releases show how far the outlook moved: [1, 2, 3, 4, 5]

• February 6: 1.1%, with a range of -0.5% to 2.7%, based on data through December 2025.
• July 17: 2.0%, with a range of 1.5% to 2.5%, after strong growth in June.
• August 21: 1.7%, with a range of 1.3% to 2.1%, after employment dipped in July.
• September 21: 1.2%, with a range of 0.8% to 1.6%. The Dallas Fed said first-quarter benchmark revisions accounted for most of the decline.
• October 19: 0.9%, with a range of 0.6% to 1.2%, after employment fell in September.

Two points stand out. The range narrowed as more of the year’s data came in. And the September change came mainly from revisions to earlier months, which is a reminder that early estimates can change after a decision has been made on them.

What the latest data shows

The Texas Workforce Commission reported 14,461,300 nonfarm jobs in September. Texas lost 11,100 jobs over the month but added 154,300 over the year, a 1.1% increase that outpaced the national rate by 0.8 percentage points. The seasonally adjusted unemployment rate was 4.4%. [6]

The Dallas Fed’s estimate shows a larger September decline of 18,900 jobs and year-to-date growth of 0.8%. [1] The two releases report different monthly figures, so each number here is cited to its own source.

Over the year to September, the gains were concentrated in a few sectors: [6]

• Professional and business services: +69,400 jobs (3.3%)
• Leisure and hospitality: +24,900 (1.6%)
• Private education and health services: +18,100 (0.9%)
• Construction: +15,000 (1.7%)
• Manufacturing: +8,400 (0.9%)
• Information: -8,700 (-3.9%)

Manufacturing posted the largest private-sector gain in September, adding 4,700 jobs. [6] The Dallas Fed also reported that the Texas Leading Index rose over the three months ending in September. [1]

A lower forecast and continued annual growth can both be accurate. The forecast compares December 2026 with December 2025. The TWC figure compares September 2026 with September 2025.

The longer view: occupations, not only totals

A one-year forecast says little about which skills a region will need. Long-term occupational projections are more useful for that question.

In TWC’s 2022 to 2032 projections, as summarized by the Texas Workforce Investment Council, electricians grow from 68,932 to 81,435 jobs, an 18% increase, with 7,798 openings a year. Construction laborers grow from 158,020 to 181,289, with 16,750 openings a year. [7]

Annual openings are much larger than net growth because they also count workers who retire or move into other occupations. For a training provider deciding how many seats to fund, openings are often the more useful number.

How to plan with a forecast range

A statewide forecast is an average across very different regions. Earlier this year, the Dallas Fed reported that Austin grew fastest among the major Texas metros in 2025, while San Antonio declined. [5] A county with a large project under construction can be hiring while the state as a whole slows.

For regional planning, I would use the forecast in three ways:

• Plan for the range. Check whether a training expansion or site plan still works at the low end of the range, 0.6%, and what you would add if growth reaches the high end, 1.2%.
• Keep statewide conditions separate from local commitments. Announced projects with hiring dates in 2027 still need preparation now, whatever the statewide rate does this year.
• Record which estimate a decision used. September’s change came mostly from revised data. Note the release date of every figure behind a decision so it can be checked when the numbers are revised.

In zScale Intellect, outside forecasts like this one are shown with their range, date and source, next to published data and zScale’s own workforce demand forecasts, which are labeled as ours.

What to watch next

The Dallas Fed’s next Texas Employment Forecast is scheduled for November 20, 2026. [1]

Which projects in your region have hiring dates inside this forecast window, and which training programs would need to start now to meet them?

Sushma Vadlamannati

Founder and CEO, zScale Intellect

Frequently asked questions

What is the Texas job growth forecast for 2026?

On October 19, 2026, the Federal Reserve Bank of Dallas forecast that Texas employment will grow 0.9% in 2026, with an 80% confidence band of 0.6% to 1.2%. That implies about 134,000 jobs and December employment of 14.5 million.

Why did the Dallas Fed lower its Texas forecast?

The forecast fell from 2.0% in July to 0.9% in October. Employment dipped in July, first-quarter benchmark revisions accounted for most of the decrease in September, and employment fell again in September.

How many jobs did Texas add over the past year?

The Texas Workforce Commission reported that Texas added 154,300 nonfarm jobs over the year to September 2026, a 1.1% increase that outpaced the national rate by 0.8 percentage points.

What is the Texas unemployment rate?

The seasonally adjusted Texas unemployment rate was 4.4% in September 2026, according to the Texas Workforce Commission.

Sources

Sources reviewed November 7, 2026.

[1] Dallas Fed: Texas Employment Forecast, October 19, 2026

[2] Dallas Fed: Texas employment forecast strengthens, July 17, 2026

[3] Dallas Fed: Texas employment forecast softens, August 21, 2026

[4] Dallas Fed: Texas employment forecast softens further, September 21, 2026

[5] Dallas Fed: Texas employment growth projected to increase in 2026, February 6, 2026

[6] Texas Workforce Commission: September 2026 labor market release

[7] Texas Workforce Investment Council: Workforce Impacts of AI, June 2026