Texas’ Labor Force Participation Bounced Back In Eight Months – But How?

The majority of the country may be feeling the pressure of inflation and a tight labor market, but Texas has remained resilient. 

According to a recent report, the state added 73,000 workers in July, marking its second biggest monthly gain this year. In fact, Texas’ annual job growth came to 6.1% during the first seven months of 2022, much higher than the average U.S. rate of 3.8%.  

So what is the region doing right?   

“People are flowing back into the labor force in our region,” said Pia Orrenius, senior economist at the Dallas Fed. “We’ve had so much labor force growth and we have a pretty high labor force participation rate – it’s actually recovered from the pandemic. “   

Thanks to the mass migration to the Lone Star state, companies have the supply to hire workers at a faster pace than other states.    

In comparison, the U.S. workforce was still 623,000 below its pre-pandemic levels as of July. However, Texas saw its labor force participation return to pre-pandemic levels in eight months.   

Workers aren’t the only ones flocking to Texas — corporations have also expanded their presence in the state thanks to its lower operational costs and tax benefits. Plus, the pool of job candidates is overflowing. 

“As often as possible, we point clients to Texas because of the growing base of talent,” said Jay Denton, chief analytics officer at Dallas-based software company ThinkWhy. “That’s where you’re gonna find a lot of people.”