Attendants of the economic forum presented by the Federal Reserve Bank of Kansas City got into the nitty gritty of the national, state and local economy.
Those gathered at Rogers State University for the forum heard from Chad Wilkerson, branch executive, vice president and economist for the Federal Reserve Bank of Kansas City's Oklahoma City branch.
Wilkerson's presentation included an overview for the national, regional and local economy.
In regards to the national economy, Wilkerson said, "Monthly data on U.S. business activity also show economic growth remains strong in mid-2018."
He referenced payroll employment and business indexes.
"The labor market has continued to strengthen," he said. "job gains have been strong and the unemployment rate has declined."
He said, "The long term level of unemployment—is somewhere between 4 and 4.5 percent and the current national unemployment is 3.9 percent and it's forecast to be around that level for a few years. Just that indicator alone would suggest we are at or slightly beyond the mandate for maximum employment. This is not the only measure of maximum employment we could look at."
He said the degree to which workers have full time versus part time employment, for example, is another indicator.
"The country is at or near capacity on maximum employment.," he said.
On other key points, Wilkerson said:
• On a 12-month basis, both overall inflation and inflation for items other than food and energy have moved close to two percent.
• The [FOMC] expects that further gradual increases…for the federal funds rate will be consistent with sustained expansion.
• The Fed has also begun to reduce its balance sheet.
He began his discussion of Oklahoma economic trends by discussing the recession experienced in the state in recent years.
"We had our own recession a few years ago that the nation didn't have," he said. "Another indicator is the downturn of employment we had in the 2015-2016 recession and the strong rebound in 2016-2017 as oil prices rebounded."
He said since working in this position, one thing that has caused him worry is the risk of having a state having their own recession, when the nation is not having a recession.
"That's a bigger problem than it sounds like on the surface. But what happens when the state is having a recession and the nation is also having a recession? Two things generally happen: The feds lower interest rates to boost the economy and congress usually passes a stimulus package of some kind. That helps, historically, to boost the economy out of recession," he said. "But when your state has a recession and the nation does not, the Fed does not lower interest rates. The national government doesn't provide a fiscal boost."
On state and local economics, he said:
• Oklahoma Gross Domestic Product has dropped considerably in 2015-2016, after oil prices fell, but has mostly grown solidly since.
• In 2018, state job growth has matched the nation after lagging in 2015-2016 the most since the 1980s.
• State job gains the past year have been led by minion (oil and gas), and most sectors have added workers.
• The Oklahoma agriculture sector has improved from a year ago, but conditions remain challenging overall.
• Tax revenues are also growing strongly, following revenue declines and budget cuts in recent years.
• Banking conditions in Oklahoma remain very good despite 2015-2016 economic slowdown.
Rogers County economy
Wilkerson then shifted gears to provide numbers that hit even closer to home. To those attending the forum, he shared his views on Rogers County economy.
He displayed graphs illustrating that the unemployment rate has come down across the state, including Rogers County. Unemployment across northeast Oklahoma is now below five percent, and is below four percent in many counties, he said. Rogers County falls within the 3.1-4.0 percent range.
In Rogers County, he said employment numbers fell considerably in 2015-2016 but employment growth in Rogers County was very strong in 2017, he said.
He outlined industries that bring the highest percentage of total income within the county.
Construction, manufacturing, state and local government and trade represent the highest percentages of total personal income share.
The turnaround in employment in the county, he said, has been largely driven by turnarounds in those industries.
"Growth in new housing units in Rogers County has greatly outpaced the state and nation since 2010," he said.
Despite trade concerns, "manufacturing activity in the region has posted record growth in 2018," he said, adding that "expectations for manufacturing remain strong, including capital spending and employment."
Wilkerson said "oil and gas production is at a record high, but with considerably fewer rigs and workers than in the past."
In summary, Wilkerson said:
• The U.S. economy continues to grow despite headwinds, and the Fed has been raising rates.
• The state and local economies were hurt by low commodity prices, but now are growing solidly.
• Strong productivity growth in the oil and gas sector could potentially limit future job growth.