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Nobody wants to leave Texas. It’s fueling an economic boom.

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Texas’s population growth is helping its economy thrive.

David Zalubowski

Many Americans are moving to the state and native-born Texans aren’t leaving.The state’s population growth has helped its economy thrive.But a booming population has come with some challenges.

They say everything’s bigger in Texas. Maybe that’s why nobody wants to leave.

With roughly 30 million people, Texas is the second-most populated state in the country behind California, and it could take the crown in the decades ahead. While California’s population declined in 2022, Texas’s increased by 470,000, the most of any US state.

Plenty of Americans have moved to Texas in recent years, but the state’s population growth has also been driven by another factor — native-born residents aren’t leaving. Eighty-two percent of Texans born in the state still resided there as of 2021, according to an August Dallas Fed analysis of which states retain the most native-born residents. Texas had the highest rate in the US — North Carolina came in second, at about 76 percent.

It’s helping fuel an economic boom at a time when many businesses are struggling to attract workers.

Between July 2022 and 2023, Texas added over 441,000 jobs, the most of any state in the nation. Additionally, between February 2020 and the end of last year, the state accounted for roughly 35% of the US’s net increase in employment during that time period.

In 2022, the state’s GDP grew to an estimated $2.4 trillion and surpassed the entire GDP of Canada. Between 2020 and February, 139 companies moved their headquarters to the Lone Star State.

Jobs and no state income tax bring people to Texas, but rising housing costs could keep some away

The Dallas Fed speculated that warm weather, friendly tax policies, and the prevalence of cities are factors that make Americans more likely to stay put.

Texas has no state income tax, and major cities like Dallas and Austin provide residents plenty of places to pursue job opportunities. Houston, San Antonio, and Fort Worth, meanwhile, are three of the six US cities where population growth is spiking the most, an August analysis by John Burns Research and Consulting found.

The Dallas Fed also said the state’s huge geographic footprint could make the long move to another state more costly — deterring residents from leaving.

If anything does slow down Texas’s population boom, it could be high housing costs. The influx of residents has contributed to rising home and rent prices in the state, which could make a move less attractive to some Americans in the years to come. In addition to building more housing, some experts say the state needs to step up its investments in infrastructure, healthcare, and education to accommodate its rising population.

In the near term, Texas’s economic growth could slow along with the rest of the nation as the Federal Reserve attempts to cool the economy and bring down inflation. But the state’s population trends should position it well in the long term.

Texas’s unemployment rate, 4.1% as of July, exceeds the latest nationwide figure of 3.8%. The Dallas Fed said the state’s jobless rate has often been a bit higher than the national figure and speculated that this is because workers — “encouraged by more robust job growth” — have entered the labor force at a quicker pace than the rest of the country. A Dallas Fed senior economist wrote last December: “Due to a stronger economy, Texas also attracts workers from other states in search of jobs, adding to the size of the labor force.”

Read the original article on Business Insider
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Share

Texas’s population growth is helping its economy thrive.

David Zalubowski

Many Americans are moving to the state and native-born Texans aren’t leaving.The state’s population growth has helped its economy thrive.But a booming population has come with some challenges.

They say everything’s bigger in Texas. Maybe that’s why nobody wants to leave.

With roughly 30 million people, Texas is the second-most populated state in the country behind California, and it could take the crown in the decades ahead. While California’s population declined in 2022, Texas’s increased by 470,000, the most of any US state.

Plenty of Americans have moved to Texas in recent years, but the state’s population growth has also been driven by another factor — native-born residents aren’t leaving. Eighty-two percent of Texans born in the state still resided there as of 2021, according to an August Dallas Fed analysis of which states retain the most native-born residents. Texas had the highest rate in the US — North Carolina came in second, at about 76 percent.

It’s helping fuel an economic boom at a time when many businesses are struggling to attract workers.

Between July 2022 and 2023, Texas added over 441,000 jobs, the most of any state in the nation. Additionally, between February 2020 and the end of last year, the state accounted for roughly 35% of the US’s net increase in employment during that time period.

In 2022, the state’s GDP grew to an estimated $2.4 trillion and surpassed the entire GDP of Canada. Between 2020 and February, 139 companies moved their headquarters to the Lone Star State.

Jobs and no state income tax bring people to Texas, but rising housing costs could keep some away

The Dallas Fed speculated that warm weather, friendly tax policies, and the prevalence of cities are factors that make Americans more likely to stay put.

Texas has no state income tax, and major cities like Dallas and Austin provide residents plenty of places to pursue job opportunities. Houston, San Antonio, and Fort Worth, meanwhile, are three of the six US cities where population growth is spiking the most, an August analysis by John Burns Research and Consulting found.

The Dallas Fed also said the state’s huge geographic footprint could make the long move to another state more costly — deterring residents from leaving.

If anything does slow down Texas’s population boom, it could be high housing costs. The influx of residents has contributed to rising home and rent prices in the state, which could make a move less attractive to some Americans in the years to come. In addition to building more housing, some experts say the state needs to step up its investments in infrastructure, healthcare, and education to accommodate its rising population.

In the near term, Texas’s economic growth could slow along with the rest of the nation as the Federal Reserve attempts to cool the economy and bring down inflation. But the state’s population trends should position it well in the long term.

Texas’s unemployment rate, 4.1% as of July, exceeds the latest nationwide figure of 3.8%. The Dallas Fed said the state’s jobless rate has often been a bit higher than the national figure and speculated that this is because workers — “encouraged by more robust job growth” — have entered the labor force at a quicker pace than the rest of the country. A Dallas Fed senior economist wrote last December: “Due to a stronger economy, Texas also attracts workers from other states in search of jobs, adding to the size of the labor force.”

Read the original article on Business Insider
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