Oklahoma may avoid economy woes

BY DON MECOY

Published: December 2, 2008

A panel of research economists confirmed Monday what many local economists had been saying for weeks: The U.S. economy is in a recession.

However, Oklahoma’s economy remains in better shape than those of many other states, and Oklahomans could avoid some of the pain that has and will be felt across much of the nation, University of Oklahoma Economist Robert Dauffenbach said.

Featured Gallery

 

Advertisement

"You have to feel pretty good about where we sit in Oklahoma in a relative sense,” the OU economist said.

Economist Steven Agee of Oklahoma City University said although the state economy has slowed, it does not appear to be in a recession.

"We still have good growth potential here,” Agee said, pointing to early reports of brisk holiday sales at local retailers and strong activity in the energy sector.

To a large extent, Oklahoma escaped the excesses of the national housing bubble, Dauffenbach said, and thus has been spared much of the resulting collapse in prices and lending.

Although oil and natural gas prices have fallen dramatically in recent months, those commodity prices remain at historically high levels, and continue to boost state tax revenue, said Dauffenbach, director of the Center for Economic and Management Research at OU’s Price College of Business.

Agee said lower gasoline prices, while cutting profits for the state’s energy sector, have benefitted local consumers.

"It affects us all positively as consumers, and since consumption makes up 70 percent of gross domestic product, that’s a positive thing for the economy,” Agee said.

Many economists believe the current downturn will be the most severe since the 1981-82 recession. The country is being battered by the most severe financial crisis since the 1930s as banks struggle to deal with billions of dollars in loan losses.

Oklahoma State University’s Center for Applied Research last month issued an Oklahoma economic forecast that projected limited job losses for the state. Oklahoma’s economy will slow in 2009, but will continue to outperform the national economy, according to the OSU forecast.

But, Dauffenbach said, the state likely will not entirely avoid taking part in the national recession.

Oklahoma’s rates of growth and employment generally follow national trends, he said. And those national trends don’t look good, Dauffenbach added.

"I think that we’re in one heck of a financial crisis that is beginning to impinge on the real economy,” Dauffenbach said. "The real economy may have gone into recession without the aid of a financial crisis, but that crisis is making everything much, much worse.”

I’m sorry it’s happening, of course.”

President George W. Bush
Referring to a global financial crisis that has eliminated millions of jobs and damaged retirement accounts

Your thoughts!