Incorporating June employment growth of 3.6 percent and new leading index data into the Texas Employment Forecast suggests jobs will grow 2.8 percent this year (December/December), with an 80 percent confidence band of 2.0 to 3.6 percent.
The forecast increased from the Dallas Fed’s previous estimate of 2.6 percent. Based on the forecast, 336,000 jobs will be added in the state this year, and employment in December 2017 will be 12.4 million (Chart 1).
The Dallas Fed’s Texas Leading Index picked up substantially over the three months ending in June, rising 1.26 percent (Chart 2). Average weekly hours worked in manufacturing and a decline in the Texas value of the dollar were the largest positive contributors to the index, both reflecting recent improvements in the state’s manufacturing sector. Energy sector indicators dragged slightly on the index, although permits for drilling new wells increased in June after declining for two consecutive months.
“Strong job growth in June and a rebound in the leading index pushed the job forecast to its highest level this year,” said Keith R. Phillips, Dallas Fed assistant vice president and senior economist. “Growth in the second quarter was 2.8 percent, the fastest we have seen since the end of 2014.”
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