Houston’s labor market recorded a 25,000-job decline in July, according to the July Workforce Solutions Gulf Coast report. The monthly decline followed two months of stronger hiring, but the report points to a specific seasonal factor behind most of the change: government employment fell by 23,600 jobs as public schools entered summer break. Private-sector employment declined by 1,400 jobs.
The July results were not uniform across industries. Professional and Business Services added 2,600 jobs, more than three times its historical July average. Professional, Scientific and Technical Services accounted for 2,400 of those jobs. Private Education and Health Services added 1,000 jobs, while Leisure and Hospitality gained 900 jobs.
Annual Job Growth Remains Positive
Looking at the past year provides a different picture. Houston gained 50,300 jobs, or 1.5%, from July 2025 to July 2026, according to the Workforce Solutions report. Seven of the region’s 11 major industry sectors are now larger than they were a year ago.
Professional and Business Services recorded the largest annual gain, adding 17,700 jobs. Construction followed with 13,100 jobs, while Private Education and Health Services added 9,800 jobs.
The report also puts the annual increase in context. The comparison with July 2025 is partly influenced by unusually weak employment numbers from that month, along with an upward revision to June’s employment figures. Still, private-sector employment performed better this July than it did a year earlier. Private-sector employment declined by 8,500 jobs in July 2025 compared with 1,400 jobs this July.
Unemployment Rate Edges Lower
Houston’s unemployment rate decreased from 5.2% in June to 5.1% in July. The rate remained above the Texas unemployment rate of 4.8% and the national rate of 4.4%, and it was also higher than Houston’s 4.8% rate in July 2025. Workforce Solutions notes that the available supply of workers continues to exceed hiring demand.
The report also highlights differences among major industries. Construction remained Houston’s fastest-growing major sector over the year despite a seasonal decline in July. Professional and Business Services continued to strengthen, particularly in Professional, Scientific and Technical Services. Financial Activities, Manufacturing and Information remained areas of weakness.
Workforce Solutions Index Continues to Improve
The Houston Workforce Solutions Index increased to 3.46 in July from 3.44 in June, marking its sixth consecutive monthly increase from a January low of 3.05. The index remains below its equilibrium level of 4.0, but its continued rise indicates improvement in labor market conditions compared with earlier in the year.
Workforce Solutions currently forecasts that Houston will add approximately 29,900 jobs between December 2025 and December 2026. The July results show a slowdown from the stronger hiring recorded in May and June, while the annual numbers indicate that employment gains are occurring across more of the region’s major industries than earlier in the year.
The next monthly update will provide August employment data. The Texas Workforce Commission is scheduled to release those figures on September 18, 2026.
For the full Houston Area Employment Situation and additional labor market information, visit Workforce Solutions’ regional economic data page.
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