News Summary
Houston’s economy demonstrates resilience despite national uncertainties. Growth, although slower, persists with lower unemployment rates and increased local spending. Challenges in the energy sector and subdued job growth are noted, but sectors like healthcare and retail show positive trends. A favorable business climate and strong housing market bolster the city’s economic outlook.
Texas
Houston’s economy has shown remarkable resilience in the face of national uncertainties, according to recent economic reports. In the first five months of 2025, the city’s economy continued to grow, albeit at a slower pace than in previous years. This deceleration is consistent with national economic trends, which are experiencing pressures from rising material costs and uncertain market conditions.
Payroll Employment and Job Growth
Despite a few setbacks, such as a slight decline in payroll employment and some job losses primarily in the professional services sector, Houston’s unemployment rate remains relatively low. Initial jobless claims, however, have seen an uptick, indicating some nervousness among the workforce. The local economy is still active, highlighted by an increase in sales and use tax collections, suggesting that consumer spending is growing.
The Houston Purchasing Managers Index (PMI) reflects a slowdown in economic momentum, yet neighborhood activities remain vibrant, driven by confident consumer spending. On the trade front, the international trade sector has experienced a decline when measured in dollar terms. Nonetheless, the number of containers processed at Port Houston continues to rise, indicating a shift in the local trade landscape. Additionally, low oil prices are affecting the crucial energy sector in Houston, diminishing its typical activity levels.
Performance Across Sectors
While sectors like construction and air travel have not fared as well as last year, the real estate market shines as a bright spot. Home sales and apartment occupancy rates have seen significant increases compared to 2024. Moreover, the sale of new vehicles in Houston is experiencing record levels, further showcasing consumer confidence.
Job Trends in Houston
From May 2024 to May 2025, the Metro Houston area generated approximately 29,600 jobs, albeit total non-farm payroll employment has experienced a slight decline to 3,471,300 jobs from a peak of 3,479,200 in December 2024. The job market did face a loss of around 7,900 jobs since the start of the year, a typical trend following holiday hiring seasons. Since February, job creation has averaged fewer than 9,000 new positions each month. Houston’s overall job growth rate decreased by 0.2 percent, yet the city ranks 10th among the largest U.S. metros for job growth. The hospitality sector is leading in new job additions, with healthcare and oil and gas extraction also contributing significantly to employment opportunities.
Future Economic Outlook
Houston’s economic outlook appears promising, with projections indicating a GDP growth of 2.2 percent in 2025, surpassing the national average of 1.9 percent. This positions Houston as the 15th fastest-growing economy among the top 50 U.S. cities. Despite Austin’s expected explosive growth rate of 4.3 percent, Houston’s demographic trends suggest a strong potential for continued consumer base expansion. The city welcomed a net migration of 85,267 people in 2024, providing a boost to the labor force.
Affordability remains a key aspect for potential homeowners in Houston, as the time to purchase a median-priced home is shorter compared to steep housing markets like Boston and New York. With a favorable business climate and absence of state income taxes, Texas is a prime destination for corporate relocations, with Houston being third in ranking for these moves in 2023.
Keeping an Eye on Economic Trends
While Houston faces challenges such as tariffs affecting trade and fluctuating energy prices, the economic forecast remains largely positive. Job growth is projected to increase in sectors like healthcare, construction, business services, and retail. The retail industry continues to flourish, with new businesses such as the luxury home goods retailer Perigold reflecting ongoing consumer interest.
In May, Texas reported a robust sales tax revenue of $4.2 billion, marking a 4.7 percent increase compared to the previous year. Although there are concerns regarding a possible economic slowdown driven by national uncertainties, particularly concerning tariffs and consumer spending, Houston’s economic resilience is evident as it prepares to navigate future challenges.
Deeper Dive: News & Info About This Topic
- The Leader News
- Wikipedia: Economy of Houston
- Houston Chronicle
- Google Search: Houston Economy 2025
- Click2Houston
- Google Scholar: Houston Economy
- Business Alabama
- Encyclopedia Britannica: Houston Economy
- Houston Chronicle
- Google News: Houston Economic Outlook
Author: STAFF HERE AUSTIN WRITER
The AUSTIN STAFF WRITER represents the experienced team at HEREAustinTX.com, your go-to source for actionable local news and information in Austin, Travis County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as SXSW, Austin City Limits Music Festival, Formula 1 United States Grand Prix, and the Austin Film Festival. Our coverage extends to key organizations like the Greater Austin Chamber of Commerce and Visit Austin, plus leading businesses in technology, automotive, and retail that power the local economy such as Dell Technologies, Tesla, and Apple. As part of the broader HERE network, including HERECollegeStation.com, HEREDallas.com, HEREHouston.com, and HERESanAntonio.com, we provide comprehensive, credible insights into Texas's dynamic landscape.
