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Dallas Fed: Texas and El Paso job growth strong but outlook shows slowing; tariffs and migration are risks
Summary
A Federal Reserve Bank of Dallas presenter told the county court that Texas grew faster than the U.S. through April, El Paso jobs rose, but business surveys show weakening activity and rising uncertainty.
The Federal Reserve Bank of Dallas told El Paso County commissioners on Monday that Texas employment growth has been robust through April but business sentiment is softening and several policy risks could slow activity.
A Dallas Fed presenter (Federal Reserve Bank of Dallas) briefed the court on statewide and local labor and business metrics. The presenter said Texas grew at about 2.6% through April versus a longer-term trend near 2%, and that El Paso’s employment gain this year was about 2.4%, faster than the metro’s historical pace.
Why it matters: Commissioners and county staff heard the bank’s forecast that Texas job growth is likely to slow in 2025, with the Dallas Fed’s economists projecting roughly 1.7% job growth for the state in 2025. The bank flagged four policy fronts — immigration, fiscal, regulatory and trade (tariffs) — as potential sources of uncertainty for local economies.
The presenter said district surveys show a deterioration in firms’ forward-looking outlooks and rising uncertainty, especially in services (the dominant sector in Texas). On tariffs, roughly 60% of surveyed Texas firms said they expect tariff increases to affect their business, and many firms report plans either to pass cost increases to customers or to absorb costs, shrinking margins.
Local detail: El Paso’s unemployment rate has ticked up slightly in recent months but remains low by historical standards; broader measures of labor underutilization (including part-time for economic reasons) have inched higher at the state level, the Fed representative said. The presenter also noted a shift in migration patterns in recent years: where domestic migration dominated in earlier periods, recent flows into Texas have been majority international migrants, a change businesses intend to draw on for labor.
Ending: The Dallas Fed speaker said the bank will continue monitoring incoming data for signs the apparent slowdown becomes tangible in payrolls and sales-tax activity. The court heard the bank’s support for regional workforce and digital-access initiatives to help raise worker skills and support employer needs.
