Oklahoma Economy Growth Flattens: Federal Reserve Bank

The Covid-19 appears to be dealing the Oklahoma economy a punch to the gut after it slowed through 2019 and by February this year may not have been growing at all, but there is hope, according to a study by the Federal Reserve Bank of Kansas City.

Since all the closures started the Saudi-Russia oil price war presented even more significant challenges for Oklahoma’s economy, and unemployment has surged, the study said.

However, low initial unemployment, good banking conditions and strong national policy response may help during the storm, the bank said.




Non-farm job growth slowed steadily last year and essentially was flat by February of this year, the bank said.

Job growth sank to negative levels in 2008 through 2010, meaning year-over-year job levels were losing faster than they were being created.  The peak was about minus 5%, compared with a year earlier, around the end of the Great Recession in 2009.

However, it took until mid-2010 for job creations to turn positive.  Job growth peaked in 2015 and began a slow decline, flattening in February this year.

The study made no predictions about Oklahoma’s job growth going forward.




A February development in world crude oil markets could have been a major factor that affected the month’s employment numbers in the state was the crude oil war between Saudi Arabia and Russia, a market analyst said.  The fight for market share took world crude oil prices down to levels that made it unprofitable for US companies to compete, and oil drilling and pumping firms were forced to lay off employees.

Oklahoma’s energy job losses were steep by February, steeper than the rest of the nation, although employment across other sectors was mixed.  Transportation and local and state government saw increases in the state, compared with the rest of the US economy, but US job growth across a variety of industries outperformed Oklahoma, the study said.




But Oklahoma’s regional factory activity in March dropped to its lowest level since April 2009, the bank said.

Instead of showing a small change in March, the Manufacturing Composite Index for the state showed a steep crop below the 50 mark that would mark the point between economic growth and retreat.

In fact, a graph of that index shows an uneven decline since peaking in 2018.  It dropped below 50 last year and struggled to get back into expansion mode before dropping sharply in March to about 41.




Like the rest of the country, new claims for unemployment insurance surged past record highs in the second half of March, the Federal Reserve Bank study showed.  New unemployment claims jumped along with national claims, although the jump lagged the national pace slightly.

This is getting serious.




Limited cash cattle trade was reported in the western Corn Belt Tuesday at $150 to $155 per cwt on a dressed basis, down $13 to $15 from last week.  Live-basis trade in the Plains last week was at $105 per cwt, down $7 to $8.

The USDA choice cutout Tuesday was up $0.81 per cwt at $226.67, while select was up $4.37 at $215.77.  The choice/select spread narrowed to $10.90 from $14.46 with 113 loads of fabricated product sold into the spot market.

There were no deliveries against the Apr futures contract tendered on Tuesday.

The CME Feeder Cattle index for the seven days ended Monday was $114.49 per cwt, up $0.08.  This compares with Tuesday’s Apr contract settlement of $116.40, up $1.37.