The Texas economy is expanding at a solid pace. Employment has grown at a 3.6% annualized rate through May, driven by job gains in the goods-producing sector. Unemployment remains near its historical low, and labor markets are tight. The Dallas Fed’s Texas Business Outlook Surveys (TBOS) suggest economic activity accelerated in May. Texas’ rig count is on the rise as oil prices continue to recover.

The three-month moving averages of the headline indexes for the manufacturing and service sector surveys continue to trend upward. All TBOS employment indexes increased and were well above their post-recession averages. The Texas Leading Index and TBOS outlook indexes point to continued expansion in the state.