AUSTIN (KXAN) — Texas’ economy remains strong but slowed more than economists expected in 2024, experts with the Federal Reserve Bank of Dallas said in a 2025 Texas Economic Outlook presentation released Feb. 7.
The report found Texas’ 2024 job growth ended up being 1.7% lower than the forecast figures, with contributing factors including higher interest rates, lowering oil and gas prices as well as election uncertainties. The 2025 analysis anticipated this year will continue in a similar trend, compounded by “post-election optimism” related to deregulation and tax cuts along with the expected negative impacts from higher tariffs, lower immigration workforce numbers and slashes to government spending.
Looking at Texas’ workforce, the report found the state’s energy, financial services and construction industries dominated as the fastest growing job sectors. Energy jobs grew 5.5%, financial services roles increased 5.1% and construction job growth rose 3.1%.
Meanwhile, high tech employment stabilized, experts said, reporting a 0% overall sector growth last year.
Looking at overall labor force growth, the Federal Reserve Bank of Dallas’ findings determined the Lone Star State sat at the helm compared to other large states, reporting a 2.9% labor force growth in 2024 and leading Illinois, California, New York and U.S. figures.
On the unemployment front, the report found both state and national level unemployment grew slightly in 2024, with the Federal Reserve Bank of Dallas’ analysis reporting a 4.2% unemployment rate in Texas and 4.1% unemployment rate in the U.S., respectively.
When looking at Texas regional growth, 2024 was the year of small metro booms, experts said.
“2024 may have been the year of the small metro…many small metros outpaced both the state and their own historical growth,” the analysis read in part.
The state’s population as a whole grew 1.7%, but smaller regions surged ahead:
- Beaumont: 4.9% growth in 2024
- Brownsville: 3.0% growth in 2024
- College Station: 2.8% growth in 2024
- Abilene: 2.6% growth in 2024
- Amarillo: 2.5% growth in 2024
- El Paso: 2.1% growth in 2024
- Laredo: 1.7% growth in 2024
- Texarkana: 1.5% growth in 2024
Comparatively, Fort Worth and Houston led the pack among the state’s largest metros, with both regions reporting a 1.4% population growth last year. Both Dallas and San Antonio experienced a 1.1% population increase, while the report found Austin trailed behind at a 0.5% population uptick.
