Economy at a Glance – July 2025

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Houston’s economy has continued to grow through the first five months of ’25 – but at a slower pace than in previous years. This aligns with national trends as the U.S. economy grows but uncertainty and rising material costs are leading businesses to take a cautious posture.

Examples of ongoing trends in Houston include:

• Payroll employment is down since the start of the year, with tepid hiring and moderate losses in the professional service sector.
• The unemployment rate remains low, but initial jobless claims are on the rise.
• Readings from the Houston Purchasing Managers Index (PMI) suggest the economy is growing at a slower pace.
• Local sales and use tax collections are up, indicating that spending has been robust.
• International trade has declined in dollar terms, though container volume in Port Houston is up.
• Low oil prices are depressing activity in energy.
• Construction contracts and air travel are down compared to last year.
• Home sales and apartment occupancy are up relative to ‘24.
• New vehicle sales are breaking records.

In the following pages, the Partnership offers its insights into Houston’s economy at mid-year.

Employment

Metro Houston added 29,600 jobs between May ’24 and May ’25. Total non-farm payroll employment now stands at 3,471,300 jobs. This is down from the record high of 3,479,200 in December, meaning the region has lost 7,900 jobs since the start of the year.

Metro Houston shed 41,800 jobs in January as is typical for that month, with temporary holiday employees being let go and annual employment contracts coming to an end. Job growth has been positive but muted since February, with the region averaging fewer than 9,000 new jobs per month.

The slow pace of growth largely reflects national trends. On a seasonally unadjusted basis, the U.S. added just 35,000 jobs year-to-date in May. The national job market has cooled during the past few months as uncertainty and increased costs have led businesses to be cautious and delay long-term hiring decisions.
Houston lands squarely in the middle of the pack for job growth when compared to its peer metros. Among the top 20 largest metros, it ranked 10th in terms of job growth rate, contracting by 0.2 percent from the start of the year. All but six of the top 20 metros have lost jobs in ’25.

Job growth has varied by sector. Since the start of the year, hospitality has been the largest driver of hiring, with bars and restaurants adding 9,200 new jobs, arts and entertainment adding 2,800, and hotels adding 1,200. Health care and oil and gas extraction saw significant increases of 6,300 and 2,900 new jobs respectively.