News Summary
Recent reports indicate a slowdown in Texas’s economic growth, as job numbers dip and construction contracts decline. While unemployment remains low, the effects of changing tariffs and foreign workforce issues add complexity to the state’s economic landscape. With inflation low and a forecasted boost in employment slightly below historical trends, a cautious outlook is warranted as Texas adapts to evolving challenges.
Texas is experiencing a slowdown in its economy, as reported by the Federal Reserve Bank of Dallas. The report highlights several factors contributing to this decline, including low job growth, decreased construction activity, and ongoing inflation trends. In June 2025, Texas employment fell by 1.3% from the previous month, raising concerns about the state’s economic momentum.
Year-to-date job growth for Texas stands at 1.8%, significantly higher than the national rate of 0.7%. However, this figure is a noticeable decrease compared to the 2.5% job growth experienced in May 2025. The Texas unemployment rate has decreased to 4.0%, reflecting some stability in the job market. Additionally, average hourly earnings saw a year-over-year increase of 4.9% in June, suggesting that while businesses are hiring less, they are committed to retaining their existing workforce.
A Dallas Fed survey noted that businesses are facing challenges related to immigration policies, which have led to a decrease in foreign-born workers. This trend is occurring alongside revisions to national job growth figures, particularly reflecting a greater slowdown in July 2025 after downward adjustments in May and June. Additionally, recent changes in leadership at the Bureau of Labor Statistics, following the termination of BLS Commissioner Erika McEntarfer, have sparked claims regarding manipulation of job statistics, although these claims remain unsubstantiated.
The construction sector in Texas is also feeling the pinch, with overall construction activities declining sharply. The average construction contract value has dropped by 26% over the last five months, while residential construction contracts are down by 7%. The housing market appears weak, compounded by rapidly changing tariffs which have led to uncertainty for builders and prompted project pauses or cancellations. Although multifamily construction saw a 4% growth in June, this is a slowdown from the 7% growth reported in May.
Inflation trends in Texas are currently low, with an increase of just 1% year-over-year as of May, raising concerns about potential decreases in consumer spending. While inflation below average could benefit consumers by limiting price increases, it may also signal a slowdown in economic activity. Interestingly, despite tariffs rising from 2.4% to 17.5%, consumers have not experienced the expected price increases. This discrepancy may indicate that businesses are stockpiling inventory to mitigate the effects of the tariffs.
The ongoing trade situation has led some international companies to evaluate their presence in the U.S. market due to high tariffs. Looking ahead, the Dallas Fed forecasts a 1.7% increase in Texas employment for 2025, slightly trailing the long-term trend of 2%. Although the economic sentiment illustrates a softening trend, experts do not anticipate a complete downturn in the state’s economy.
The Federal Reserve continues to monitor economic indicators closely and expects to release further data that will provide insight into the actual effects of tariffs on the economy in upcoming reports. While Texas is currently experiencing challenges across various sectors, the higher-than-average job growth compared to national trends provides a glimmer of stability amid an uncertain economic climate.
Deeper Dive: News & Info About This Topic
- KDH News: Texas Economic Indicators
- San Antonio Express-News: Texas Economy Forecast
- ABC 13: Chances of a Recession
- Wikipedia: Economy of Texas
- Houston Chronicle: Texas Oil Price Drop
Author: STAFF HERE COLLEGE WRITER
The COLLEGE STATION STAFF WRITER represents the experienced team at HERECollegeStation.com, your go-to source for actionable local news and information in College Station, Brazos County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Brazos Valley Fair & Rodeo, Chilifest, and Aggie Muster. Our coverage extends to key organizations like the Bryan-College Station Chamber of Commerce and United Way of the Brazos Valley, plus leading businesses in education, biotechnology, and retail that power the local economy such as Texas A&M University, Fujifilm Diosynth Biotechnologies, and H-E-B. As part of the broader HERE network, including HEREAustinTX.com, HEREDallas.com, HEREHouston.com, and HERESanAntonio.com, we provide comprehensive, credible insights into Texas's dynamic landscape.
