Texas has cemented its position as the nation’s job creation powerhouse, adding a whopping 195,600 nonfarm jobs over the past year and setting new records for both total employment and labor force size.
The Lone Star State’s economy continued its impressive expansion through August 2025, with total nonfarm employment reaching an all-time high of 14,347,700 jobs. Texas added 17,600 positions in August alone, while its civilian labor force grew to a record 15,857,300 workers, according to data released by the Texas Workforce Commission.
Outpacing the nation
The state’s annual job growth rate of 1.4% has consistently outperformed the national average, surpassing it by half a percentage point. “Texas is America’s jobs leader,” Governor Abbott proclaimed. “With the best business climate in the nation and a skilled and growing labor force, Texas is where businesses invest, jobs grow, and families thrive.”
This robust growth comes despite some economists noting potential headwinds on the horizon. “Employment growth seems to be softening and is on a slower trajectory for the second half of the year,” cautioned Luis Torres, Dallas Fed senior business economist, who noted that the year-to-date job growth of 1.6% remains below the state’s long-term trend of 2.0%.
What’s driving this continued expansion? The state’s business-friendly regulatory environment has long been credited as a key factor, along with its lack of personal income tax and relatively affordable housing compared to coastal markets. Governor Abbott emphasized that “Texas will continue to cut red tape and invest in businesses large and small to spur the economic growth of communities across our great state.”
TWC Chairman Bryan Daniel highlighted the dual positive trends: “The increase in the civilian labor force and the drop in the unemployment rate highlight continued strength in the Texas economy.” The state’s unemployment rate currently stands at 4.0%, slightly above the national average but still reflecting relatively tight labor market conditions.
Not all sectors are enjoying equal success, however. Goods-producing industries, particularly mining and logging, have faced challenges due to declining oil prices. Meanwhile, metropolitan areas across the state have shown varied performance, with San Antonio and Brownsville-Harlingen rebounding strongly while Houston and Lubbock have lagged behind.
Growing pains
The rapid expansion of Texas’ labor force — which grew by nearly 170,000 workers over the past year — brings its own challenges. “Texas’ expanding labor force is a testament to our state’s appeal, but it also means we have a responsibility to ensure everyone has access to the education, training, and support services they need to succeed,” said TWC Commissioner Representing Labor Alberto Treviño III in a recent statement.
As the state’s population continues to swell with transplants from across the country, infrastructure and housing pressures mount in major metropolitan areas. Still, the economic engine shows no signs of stalling completely, even as some economists project a moderation in growth rates.
The question now becomes: can Texas maintain its edge as other states compete aggressively for business relocations and expansions? With six consecutive months of record-high job counts, the immediate answer appears to be yes — though the softening trajectory suggests the days of explosive growth may be giving way to a more sustainable pace of economic expansion.
