Dave Shideler
Presentation to the County Officers and Deputies Association
September 17, 2009
Oklahoma City, OK
WILL THE OKLAHOMA ECONOMY “STALL
OUT”?
OUTLINE

Current State of the Oklahoma Economy
Unemployment
 Real estate
 Retail sales


Previous Experience
Kansas City Fed District vs. other Fed Districts
 Industrial structure
 Commodity prices


Looking Forward
Deflation
 Diversified economy

UNEMPLOYMENT RATES, JULY 2009
Source: Bureau of Labor Statistics, September 11, 2009 http://data.bls.gov/map/servlet/map
UNEMPLOYMENT RATE RELATIVE TO US
Source: Bureau of Labor Statistics, September 11, 2009 http://data.bls.gov/map/servlet/map
UNEMPLOYMENT CHANGE SINCE RECESSION BEGAN
Source: Bureau of Labor Statistics, September 11, 2009 http://data.bls.gov/map/servlet/map
REAL ESTATE
Average New Home Prices, US vs. South, 2005-2009
270 000
250 000
230 000
210 000
United States
190 000
South
170 000
2005
2006
2007
2008
Source: http://www.census.gov/const/quarterly_sales_cust.xls , accessed 9/11/2009 at 9:15 am
2nd quarterp
1st quarterr
4th quarter
3rd quarter
2nd quarter
1st quarter
4th quarter
3rd quarter
2nd quarter
1st quarter
4th quarter
3rd quarter
2nd quarter
1st quarter
4th quarter
3rd quarter
2nd quarter
1st quarter
150 000
2009
Average Price, Homes Sold in Oklahoma, 2006-2009
170 000
160 000
150 000
140 000
130 000
120 000
110 000
100 000
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr
2006
2007
2008
2009
MORTGAGE DELINQUENCY RATES, JUNE 2009
Delinquency rates are defined as the percentage of mortgages that are 90 or more days behind in payments; national delinquency rate was 5.81-9.24%, according to TransUnion LLC
and Mortgage Bankers’ Association, respectively. Both are up since the previous year. SOURCE: Federal Reserve Bank of New York, http://www.newyorkfed.org/mortgagemaps/,
accessed 9/11/09 at 3:30 pm
MORTGAGE DELINQUENCY RATES RATE OF
CHANGE, 2008-2009
SOURCE: Federal Reserve Bank of New York, http://www.newyorkfed.org/mortgagemaps/, accessed 9/14/09 at 11:00 am
CREDIT CARD DELINQUENCIES, JUNE 2009
Delinquency rates are defined as the percentage of bank cards that are 60 or more days behind in payments; national delinquency rate was 1.17%,
according to TransUnion LLC. SOURCE: Federal Reserve Bank of New York, http://www.newyorkfed.org/mortgagemaps/, accessed 9/11/09 at
3:30 pm
CREDIT CARD DELINQUENCIES RATE OF
CHANGE, 2008-2009
SOURCE: Federal Reserve Bank of New York, http://www.newyorkfed.org/mortgagemaps/, accessed 9/14/09 at 11:00 am
PERCENT CHANGE IN RETAIL SALES,
AUG 2008-AUG 2009
SOURCE: Oklahoma Tax Commission
Looking Back at the 1980s and 2000s Recessions for Clues
SO, WHAT SHOULD WE EXPECT GOING
FORWARD?
Appendix
2. U.S. RecessionsBY
by Federal
Reserve District,
1957-present
U.S.
RECESSIONS
FEDERAL
RESERVE
DISTRICT, 1957-PRESENT
234 12
1234 12
1234 1234
1234 1234
34 123
1234 1234 1
1234 1234 1234 1234
34 1234 1234 123
234 1234 1
U.S.
1-Bos
2-NY
3-Phi
4-Cle
5-Rich
6-Atl
7-Chi
8-StL
9-Min
10-KC
11-Dal
12-SF
SOURCE: Wilkerson, C. “Recession and Recovery Across the Nation: Lessons from History.” Economic Review, 2nd Q 2009: 5-24.
Employment Growth Since the End of the 2001 Recession
Percent
15
During expansion
12
During current recession*
Total
9
6
3
0
-3
-6
U.S.
1 - Bos
2 - NY
3 - Phi
4 - Cle 5 - Rich 6 - Atl
* Through Q2 2009, estimated based upon preliminary state
7 - Chi
8 - StL 9 - Min 10 - KC 11 - Dal 12 - SF
-level data. Expansion and recession size is based on actual District ti
SOURCE: Wilkerson, C. “Recession and Recovery Across the Nation: Lessons from History.” Economic Review,
2nd
ming
Q 2009: 5-24.
OKLAHOMA EMPLOYMENT, MONTHLY, 1980-JUL.
2009
http://data.bls.gov/PDQ/servlet/SurveyOutputServlet
OKLAHOMA UNEMPLOYMENT RATE, MONTHLY,
1980-JUL. 2009
http://data.bls.gov/PDQ/servlet/SurveyOutputServlet
MINING
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
Mining Output
Percent of Gross State Product
Percent of Total Employment
Mining Employment
25%
20%
15%
10%
5%
0%
MANUFACTURING
Manufacturing Employment
12%
10%
8%
6%
4%
2%
0%
Manufacturing Output
Percent of Gross State Product
Percent of Total Employment
14%
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
RETAIL TRADE
Retail Trade Employment
16%
14%
12%
10%
8%
6%
4%
2%
0%
Retail Trade Output
Percent of Gross State Product
Percent of Total Employment
18%
12%
10%
8%
6%
4%
2%
0%
SERVICES
Services Employment
35%
30%
25%
20%
15%
10%
5%
0%
Services Output
Percent of Gross State Product
Percent of Total Employment
40%
25%
20%
15%
10%
5%
0%
GOVERNMENT (ALL LEVELS)
Government Employment
19%
19%
18%
18%
17%
17%
16%
16%
15%
Government Output
Percent of Gross State Product
Percent of Total Employment
20%
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
COMMODITY PRICES: OIL
COMMODITY PRICES: NATURAL GAS
COMMODITY PRICES: WHEAT
COMMODITY PRICES: CATTLE
TAKE AWAY

State and local budgets have been/will be hit hard
by recession
State Level: Gross Production Receipts and Sales Tax
Revenues
 Local Level: Sales Tax Revenues; little impact on ad
valorem revenues

Though some similarities between ‘81-’83
recession, there isn’t the construction “boom” fall
out
 Plenty of labor, now and in the future; will there be
jobs? Which sectors?
 Change in consumer behavior?
