Texas led the nation in terms of new non-farm jobs, according to a Bureau of Labor Statistics report released Tuesday.
The state’s employers added 650,100 non-farm payroll jobs — a 5% increase — between December 2021 and December 2022, according to the report. This growth surpassed that of California and Florida, which added 621,400 and 440,000 jobs, respectively. In total, 13.7 million Texans worked outside of agriculture as of the end of 2022, compared to about 13 million at the end of 2021.
The report continues the stream of strong economic data for Texas. The state continued its 14-month streak of record employment in December, according to a previous report from the Texas Labor Commission. And the state’s unemployment rate fell to 3.9%, falling below 4% for the first time since forced business closures at the start of the coronavirus pandemic.
Texas employers added 29,500 non-farm payroll jobs in December, according to TWC. Jobs in education and health accounted for more than 40% of that figure with 12,700 jobs, leading to a rise in jobs last month. Financial services and manufacturing also added 6,300 and 5,500 jobs, respectively.
“No wonder Texas is leading the nation in job creation, adding more jobs in 2022 and growing faster than any other state,” Gov. Greg Abbott said in a news release Tuesday. “Texas works when Texans work, and in this legislative session, we will continue to empower and ensure that Texas remains the best state to live, work, start a business, and raise a family.”
But economists at the Federal Reserve Bank of Dallas have been noting that Texas has been in an economic downturn since September, most recently citing a slowdown in job growth, output and inflation in the state. For comparison, in September the state added 40,000 jobs, almost 1.4 times more than in December.
“It’s still good job growth and more in line with our ability to fill those jobs,” said Pia Orrenius, senior economist at the Federal Reserve Bank of Dallas.
In 2023, Orrenius expects Texas to see “significantly slower” job growth, but it will likely still be faster than the rest of the country. At the same time, she said that the Dallas Fed is not yet forecasting a recession in Texas for this year, although she acknowledged that an economic downturn could still occur in the second half of the year or early 2024.
Texas Comptroller Glenn Hegar previously told The Texas Tribune that he expects a “relatively shallow and short-term” recession in the state in 2023, but warned that the Federal Reserve’s efforts to curb inflation nationally could exacerbate the recession. Inflation in Texas has been declining month by month, but Orrenius says the figure is still “very high” year after year.
“A soft landing is what we are seeing for Texas in 2023,” she said.