Texas adds over 112,000 jobs in a year but new report reveals unexpected economic slowdown signs
Texas – Texas’ labor market continues to show strong job creation numbers, but newly released data reveals a more complicated picture beneath the surface, raising concerns about a possible slowdown despite continued growth. According to the Texas Workforce Commission, the state added 40,100 nonfarm jobs in January 2026, bringing total employment to a record 14,379,500 positions. Over the past year, Texas added 112,200 jobs, outpacing the national job growth rate and reinforcing its reputation as an economic powerhouse.
At the same time, the state’s civilian labor force grew by 152,000 people over the year, reaching a total of 15,955,200. Texans working, including those self-employed, totaled 15,267,100. These figures point to continued expansion, but other indicators suggest that not all parts of the economy are moving forward at the same pace.
“Texas employers continue to spur our state’s economic momentum, adding more than 40,000 jobs across a wide range of major industries. TWC remains committed to supporting Texas’ pro-growth policies and world-class talent pipeline that make Texas the best place to do business,” said TWC Chairman Joe Esparza.
Governor Greg Abbott also highlighted the state’s economic strength, stating, “Texas is where free enterprise flourishes and opportunity abounds. That is why Texas is a magnet for innovative businesses seeking to invest with confidence and grow jobs across diverse industries. With the Best Business Climate in America and record new funding for our schools, high-demand career training, and critical infrastructure, there is no state better positioned to sustain growth.”
Signs of Slowdown Beneath Strong Job Growth
Despite these positive figures, the latest report shows several warning signs that suggest the economy may not be as strong as it appears on the surface. For the first time in recent history, Texas failed to break its own job records across multiple categories, a shift from its usual pattern of consistent record-setting growth.
More concerning, the state reported a decline in its civilian labor force over the month, losing 3,400 workers in January. While the annual numbers remain positive, this monthly drop signals potential instability in workforce participation.
Additionally, unemployment trends are raising eyebrows. Texas’ not seasonally adjusted unemployment rate rose to 4.5%, though it remains slightly below the national rate of 4.7%. However, several metropolitan areas reported unemployment levels among the highest seen in recent years, approaching levels recorded during the COVID-19 lockdown period.
These mixed signals suggest that while job creation continues, not all Texans are benefiting equally, and certain regions may be facing greater economic pressure.
Industry Growth and Uneven Progress
Breaking down the numbers further, certain industries are driving much of the state’s job growth. The construction sector led all private industries, adding 11,800 jobs in January and achieving an annual growth rate of 3.4%, the highest among major sectors.
Leisure and Hospitality, along with Private Education and Health Services, each added 10,300 jobs over the month. Professional and Business Services followed closely, adding 10,200 positions. These gains reflect strong demand in key sectors, but they also highlight how growth is concentrated rather than evenly spread across the economy.
“The growth we’re seeing in sectors like Construction and Leisure and Hospitality is promising, but we need to ensure these jobs translate into real opportunities for Texas workers,” said TWC Commissioner Representing Labor Alberto Trevino III. “That’s why TWC’s focus on apprenticeship programs and initiatives like the Jobs and Education for Texans grant is vital, providing the training and resources Texans need to succeed in these growing fields and build lasting careers.”
TWC Commissioner Representing the Public Brent Connett also emphasized the broader success of the state’s workforce system, stating, “Job growth in Texas continues to outpace the nation thanks in large part to a dynamic workforce system that enables both employers and job seekers to thrive. TWC resources connect working Texans with high-demand career opportunities while ensuring Texas businesses have access to a skilled workforce.”
A Mixed Outlook Moving Forward
While Texas continues to outperform the national average in job growth, the latest data presents a more nuanced reality. Strong hiring numbers are being offset by labor force fluctuations, rising unemployment in certain areas, and a slowdown in record-breaking performance.
The delay in releasing the data due to a federal government shutdown also adds another layer of uncertainty, making it more difficult to assess real-time economic conditions.
Overall, Texas remains a leader in job creation, but the emerging signs of strain suggest that maintaining this momentum may become more challenging in the months ahead.
