Texas Keeps Adding Jobs, but Housing and Services Are Cooling
Texas set another payroll record in August and unemployment dipped to 4.4 percent. But the Dallas Fed trimmed its forecast as housing slowed and service businesses flattened.
The Texas economy is still growing, but not evenly. The latest state and Federal Reserve numbers show more jobs and rising wages, alongside a weak housing market and a service sector that has stalled.
Jobs and wages
Texas had 14,469,300 nonfarm jobs in August, a record high for the seventh time in nine months, according to the Texas Workforce Commission's Texas Labor Market Review. The state added 5,600 jobs for the month and 159,400 over the past year, a 1.1 percent increase. Government led August's gain with 5,900 positions.
The seasonally adjusted unemployment rate fell to 4.4 percent. The Federal Reserve Bank of Dallas noted that is still above the national rate of 4.2 percent in September.
The Dallas Fed, which applies its own seasonal adjustments, said payrolls grew at a 1.6 percent annualized pace from May to August, led by professional and business services, leisure and hospitality, and manufacturing. Jobs fell in information, other services and oil and gas.
Paychecks are rising. Average hourly wages in Texas reached $36.01, up 4.5 percent from a year earlier and faster than the 3.1 percent national increase in September, the Dallas Fed said. Texas wages still trail the national average of $37.73.
Where it is cooling
The Dallas Fed revised its 2026 Texas job growth forecast down to 1.2 percent. Year to date, employment is up an annualized 1.0 percent.
Factories are humming. The Dallas Fed's Texas Manufacturing Outlook Survey index rose to 29.5 in September, far above its long-run average of 9.7. But its service sector index slipped to -0.9, meaning essentially no growth.
Housing remains weak. Existing-home sales fell 2.2 percent in August on a three-month average as mortgage rates ticked up to 6.7 percent, and single-family permits dipped 2.0 percent as builders pulled back.
Banks are cautious too. In the Dallas Fed's banking survey, loan growth slowed and bankers said they expect loan demand and business activity to decline over the next six months, with loan performance getting worse.
What it means for families
For most Texans, the picture is mixed. Work is available, and wages are growing faster than in much of the country. But high mortgage rates keep many young families out of a first home, and a slowdown in services can hit restaurants, shops and small businesses first.
Strong manufacturing is a bright spot, and it rewards skilled work. Dock Line has written about new Pell grants for short-term job training and the trades young people were told to avoid. A steady job, honest work and living within your means are still the surest footing when the economy wobbles.
Hero photo: Joe Mabel via Wikimedia Commons, CC BY-SA 3.0, cropped and resized.
