Texas Job Market Sends Mixed Signals as September Payrolls Decline

Manufacturing and information services added jobs, but statewide losses and a slower forecast point to a more cautious hiring environment.

Texas employers shed 11,100 nonfarm jobs in September, even as the state added 154,300 jobs over the past year. The seasonally adjusted unemployment rate held at 4.4%, according to state labor market data.

The figures show a labor market still growing year over year, but with uneven momentum across industries. Manufacturing led September’s private-sector gains, adding 4,700 jobs. Professional and business services added 1,600, while information services added 1,400.

Those gains were outweighed by losses elsewhere. Government recorded the largest decline, shedding 5,900 jobs, according to the Dallas Fed’s September analysis. Construction and education and health services also lost jobs, followed by trade and transportation, financial services, leisure and hospitality, and oil and gas.

The Dallas Fed’s October 19 forecast projects Texas employment will grow 0.9% in 2026, with an 80% confidence range of 0.6% to 1.2%. That is below the state’s long-run average job growth of about 2%. The forecast implies roughly 134,000 jobs added this year.

For small-business owners, the report is a reason to plan carefully, not a signal to assume demand has disappeared. Job growth over the past year remains positive, and manufacturing’s expansion may create opportunities for suppliers, logistics providers, technical contractors and workforce-training firms. The Dallas Fed said manufacturing gains were supported by oil and gas activity, export growth and construction tied to artificial intelligence expansion.

At the same time, slower overall growth can make customers more cautious and hiring decisions harder to predict. The Dallas Fed pointed to labor-supply constraints, partly associated with sharply lower immigration, as one factor consistent with moderated job growth. For businesses, that can mean competing for qualified workers even while the broader pace of hiring cools.

Owners may want to review staffing plans against actual sales and project pipelines, keep cash reserves flexible, and focus recruiting on roles that directly support revenue or essential operations. Employers considering expansion can also monitor sector and regional trends: the statewide totals do not capture every local market, and monthly changes can move in different directions across industries.

September’s data offer two signals at once: Texas continues to add jobs over the year, but recent hiring has become less broad-based. For small businesses, the practical challenge is to stay ready for opportunities while budgeting for slower, less predictable growth.