Oklahoma Economic Update: State should weather national impact

Friday, February 8, 2008

While a weakening national economy would impact Oklahoma’s economic growth, even the worst case scenario would include only modest job losses for the state by the end of the year. Higher energy prices and a better outlook for housing should keep state job and income growth above national levels, according to Dr. Mark Snead, economist and director of the Center for Applied Economic Research at Oklahoma State University.

In his most pessimistic scenario, Snead projects that job growth in Oklahoma would come to a halt for the second and third quarters before resuming growth by the end of the year.  “The pessimistic model assumes that higher energy prices will have a much more adverse impact on the national economy than I anticipate and really start to affect Oklahoma,” said Snead, who notes the worst case outcome would still likely be positive for job and income growth in the state.
On the other hand, if a mild national recession materializes in 2008, Snead expects state job growth to continue with only 8,000 new jobs added, about half of what he previously projected for 2008. “Even though job growth could be cut in half, we would still outperform the national economy thanks to the insulation provided by a stable housing sector and higher energy prices,” said Snead.

Oklahoma currently ranks 13th among the states with a 12-month job growth rate hovering around 1.5 percent, well above the national rate of 0.8 percent. Most of the states ahead of Oklahoma in the ranking are energy states or traditional fast-growth states, or both.
For more information, go to http://economy.okstate.edu/ .