Dallas Fed: Texas job growth to slow, Houston to see the biggest impact

By Andrea Rumbaugh

Troubles in the oil and gas industry will contribute to slower job growth in Texas, according to a downward revision by the Federal Reserve Bank of Dallas in its “Southwest Economy” report released Wednesday.

The Dallas Fed now forecasts that Texas will add 117,000 to 235,000 jobs in 2015, down from its January forecast of 235,000 to 295,000 new jobs.

Declines in the oil and gas industry, tight labor markets and weakening exports led to the revision, economist Keith Phillips and research analyst Christopher Slijk wrote in the report.

“If the national figure remains constant or picks up slightly in 2015, there is a good chance that Texas will trail the nation in job growth for the first time in 12 years,” they wrote.

However, 2015 will be a year of mixed growth, according to the report. The energy sector lost jobs following the sharp decline in oil prices, but employment in health care will grow rapidly.

In a separate report, Dallas Fed economist Michael Plante cited an earlier model predicting 140,000 jobs, or 1.2 percent of total Texas nonfarm employment, would be lost this year due to the decline in oil prices.

“The 140,000 job-loss forecast estimates the number of jobs that currently exist but would disappear because of lower oil prices,” according to the report, which later said this shouldn’t be viewed as a forecast of an overall jobs contraction.

And of the smaller metro areas, Midland and Odessa will be the most affected by the oil and gas sector’s slump. Houston will be the most impacted among larger metro areas, according to assistant economist Amy Jordan in a third report released Wednesday.

“Whether counting the value of economic activity or jobs, the recent decline in oil prices will likely negatively affect Houston more than the other metros,” her report stated.