Texas job growth is expected to continue in 2026, but at a modest pace compared with previous years. This steady improvement suggests the overall economy is strengthening, even as some industries grow slowly. For families and workers, that means more opportunities without rapid inflation or volatility. BCL’s consumer loans and financial education remain critical tools for building stability and confidence in a cautious job market.

Federal Reserve Bank of Dallas Vice President and Senior Economist Pia Orrenius presented the Texas Economic Outlook this past February 6, 2026, noting that 2025 saw job growth slow to just 0.1%—the weakest pace in a decade outside of 2020—compared to 1.6% in 2024. Tech and energy sectors declined, residential construction cooled, and while unemployment held steady, underemployment increased. She attributed the slowdown to factors such as tariffs, economic uncertainty, government cutbacks, and slower domestic and international migration, though tariffs had less impact than expected. Despite weak hiring, GDP remained solid at 2.5%, reflecting “jobless growth” driven by higher productivity, partly fueled by AI, and energy costs in Texas stayed below the national average.

Looking ahead to 2026, employment growth is expected to pick up modestly. Key drivers include continued AI investments and expansion of data centers, easing regulations and financial conditions, and economic activity related to the FIFA World Cup. However, challenges remain, including tight labor supply, a soft residential housing market, low oil prices, and potential cuts to safety net programs that could weigh on overall growth.

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