Unprecedented new tariffs. A sweeping immigration crackdown. Widespread federal jobs cuts. Several months into a whirlwind of federal policy shifts, the U.S. economy has noticeably cooled, and recent data suggests cracks have also started emerging in long-roaring Texas.
But the Lone Star State is still likely to continue performing better than the country as a whole, economists told The News, The same is true for Dallas-Fort Worth, which years ago solidified its own place among the country’s most booming metro regions.
“The economy in North Texas does seem to have slowed,” said Bill Adams, chief economist at Comerica Bank. “But that slowdown is against the backdrop of a really strong secular growth trend in our region. So everything’s relative.”
After several years of strong GDP growth, the national backdrop has also shifted: While the ongoing federal government shutdown has put a freeze on new data, earlier reports indicate that throughout 2025, the U.S. economy has been stuck in neutral. National GDP is still on track to grow this year, but the expected growth rate — 1.9%, according to Sept. 23 report from S&P Global — is projected to fall well below that of recent years.
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Year-over-year inflation, meanwhile, has ticked up every month since April. The labor market has become stagnant, even as AI, in particular, continues to provide a significant GDP boost.
“The bottom line? The economy should be able to avoid an economic downturn over the next six, 12, 18 months,” Mark Zandi, chief economist of Moody’s Analytics, said during a recent presentation at the Federal Reserve Bank of Dallas. “But it’s going to be uncomfortable at times.”
The macroeconomic challenges are surfacing after a prolonged stretch of prosperity for Texas and D-FW. For several years, much of this region’s economic success has come from a kind of virtuous cycle: As dozens of corporations have flocked to North Texas, so have millions of new residents, and the explosive population growth has only fueled more economic growth across a wide spectrum of industries.
One recent report, from the data firm Lightcast, ranked D-FW first among the country’s large metro areas in its annual workforce talent attraction scorecard — largely because of the region’s ongoing population explosion.
“Dallas has been scoring quite well over the past decade,” said Cole Napper, the firm’s vice president of research. “If I were to give my own hypothesis on why that’s the case, it’s because of a cumulative effect where growth begets more growth.”
Texas’ overall economy — buoyed by everything from cheap housing to a prolonged oil boom to a rising tech sector — has also been surging for the better part of two decades: Last year, the state’s total GDP came in above $2.7 trillion, more than double its size in 2010, while its overall job production and population growth figures have ranked among the country’s highest for years.
“Economically, Texas ranks number one for the most new jobs over the past month, over the past year, for as long as the eye can see,” Gov. Greg Abbott boasted during a bill signing ceremony in Fort Worth in June. “We are the job creation engine of the United States of America.”
But more recently, that engine has been cooling. In recent years, Texas has averaged a job growth rate of 2% annually, said Luis Torres, a senior economist at the Dallas Fed. But a September Dallas Fed report forecast Texas was now on pace for a 1.3% overall jobs increase in 2025, down from the 1.5% forecast the bank had predicted a month earlier, a softened forecast that largely came from revisions to first-quarter data.
“We’re not entering a recession, we’re not losing jobs,” said Torres. “It’s still a good number, but you’re below trend.”
Some Texans, though, have been losing jobs: In recent weeks, major companies, including Texas Instruments, Spirit Airlines and the Amazon contractor Accelore have collectively laid off hundreds of workers. In August Texas recorded a 4.1% seasonally-adjusted unemployment rate, one tenth of a percentage point higher than July, while the state’s major metro areas all recorded sharper monthly increases — including Dallas-Fort Worth, which notched a 4.0% unemployment figure in July but a 4.4% rate in August.
More pain to D-FW could be coming. The North Texas economy relies heavily on trade, and many economists are predicting the negative impacts of President Donald Trump’s tariffs — which businesses have partly managed to delay by front-loading orders and absorbing some costs. Other federal policies, like the administration’s announcement last month of a new $100,000 fee on temporary visas for skilled workers, are also expected to hit D-FW hard, because North Texas relies heavily on immigrants.
The surcharge will apply to a visa program largely used by high-paid tech workers and left many Dallas-area workers in a panic: Besides the region’s burgeoning tech sector, the visa changes could also damage D-FW’s established healthcare industry and even the incoming Y’all Street stock exchanges, said Dean Stansel, a professor at SMU’s Cox School of Business.
“Those are tech jobs in a way too,” he said. “It could threaten the success of that initiative.”
Still, economists say that Texas, after enjoying a booming economy for years, remains relatively well-positioned, with a labor market that’s still growing faster than the national average even if it’s cooled.
And prospects for D-FW, in particular, are still bullish: The region is likely to suffer disproportionately from a broader immigration slowdown, because incoming foreign workers, especially from Latin America, have played a significant role in North Texas’ population and economic boom. But at the same time, said Adams, the region still has a lot going for it, with a relatively affordable cost of living, open space for more development and sufficient resources, if they’re managed well.
“And so that is going to be a magnet for people seeking economic opportunity and a good quality of life for themselves and for their kids for a long time,” he said.
It all means that North Texas’ famous growth story isn’t done yet, he added.