MCALLEN, Texas - Regional unemployment rates jumped significantly in January, with over 2,700 jobs lost in the “Trade, Transportation, and Utilities” sector.
This is a normal cyclical change that occurs in the retail sector, as additional staff hired for the Thanksgiving-to-Christmas shopping season are terminated from payrolls.
However, If you look at the unemployment chart and compare January 2026 to January 2025, you will see that our unemployment rates at the county level across the region are noticeably higher than they were this same time last year.
Nationally, we are seeing a weakening labor market, with higher unemployment rates and fewer new jobs being created, as businesses hold off on hiring but try to hold onto the workforce they have, generally. Our manufacturing industry is still fairly sluggish overall, although we are seeing a lot of opportunities for manufacturing job growth taking place in our region. I expect we will see a tightening labor market in the Rio Grande Valley, along with quickly rising wages, as we continue to see new manufacturing companies locate to our region. Many more new companies are in the Valley pipeline, according to our economic development organizations.
Over the past year:
* Texas lost 8,100 manufacturing jobs, lost 4,700 oil and gas jobs, and gained 30,100 construction jobs
* The entire USA lost 55,000 manufacturing jobs in Calendar Year 2025
* In Calendar Year 2024, the USA gained an estimated 1.9 million total jobs
* In Calendar Year 2025, the USA only gained an estimated 181,000 total jobs - clearly showing decelerating job growth
* The January 2025 USA unemployment rate was 4.0%
* The January 2026 USA unemployment rate was 4.3%
* The overall size of the civilian labor force barely grew over the past 12 months. For the entire USA, it was flat and it typically grows by one or two million people in a year at a one to two percent annual growth rate. I imagine much of this is attributable to the immigration enforcement measures in place over the past year, due to both expulsions and possibly some immigrants keeping a low profile and not looking for work presently.
I am in the midst of conducting our 2026 South Texas Manufacturers Association “Industry Wage & Benefit” survey. If any manufacturing companies would still like to participate, please let me know ASAP! There is no cost to participate, and you will receive a free copy of the final report. There is no better resource for benchmarking your pay and benefits practices.
Editor’s Note: The above commentary was penned by Mike Willis, executive director of South Texas Manufacturers Association, in response to the January 2026 Employment report from Workforce Solutions. Workforce Solutions represents Hidalgo, Starr and Willacy Counties. Here is their January 2026 Employment report:
