The economy of Texas is beginning to exhibit signs of a slowdown, as indicated by a recent analysis from the Federal Reserve Bank of Dallas. The job growth forecast for the state this year has been revised down from 2.4% to 1.9%. According to Luis Torres, a senior business economist at the Dallas Fed, the deceleration in growth during the latter half of the year can be linked to a softening labor market along with job losses in the service industry.
“The combination of slower employment growth and drops in both the Texas and U.S. leading indexes has adjusted our predictions downward,” Torres explained. Texas experienced a loss of around 1,900 jobs in June, a stark contrast to the addition of 36,700 jobs recorded in May, based on seasonally adjusted and benchmarked payroll employment figures. Even with the anticipated slowdown, economists Bill Adams and Waran Bhahirethan from Comerica Bank project that Texas will continue to surpass the national economy.
Projected slowing of Texas economy
Nevertheless, they anticipate a decline in job growth as interest rates increase, inflation remains, and the softer economic conditions in both the U.S. and globally restrict the abilities of Texas employers. This economic downturn has resulted in job losses for various employees.
In Austin, nearly 2,700 workers at Tesla were let go in June, and approximately 1,500 employees of Walmart in the Dallas-Fort Worth area have been asked to relocate by the end of January or risk losing their jobs. The forecast from the Dallas Fed indicates that Texas is on track to add 266,100 jobs this year, with employment anticipated to reach 14.3 million by December. Torres remarked, “We are returning to pre-pandemic job levels, indicating that these numbers are sustainable.”
Despite the obstacles, the Dallas Fed holds a positive outlook regarding the general trend, highlighting a return to more sustainable growth rates.
The economic performance of the state is expected to continue exceeding that of the national economy, albeit at a more tempered rate compared to previous years.
