This week, OK Policy put out the latest edition of Numbers You Need, our monthly bulletin of key economic and budget indicators for the state. Our main headline was of an economic recovery stuck in neutral. While there are certain encouraging signs of the state emerging from out of the Great Recession, the downturn is continuing to hit segments of the population hard. High levels of distress can be seen, for example, in record numbers of home foreclosures and continued growth in food stamp and Medicaid caseloads. But it is the persistence of high rates of unemployment and slow job growth that provide the strongest and most worrisome indicator of the distances still needed to be traveled to a solid, broad-based recovery.

Oklahoma’s unemployment rate hit 6.8 percent in June, rising one-tenth of one percent for the second straight month and falling just short of the highest rate registered during this recession (6.9 percent from August to October 2009). Oklahoma’s unemployment in June remained well below the national rate of 9.5 percent and was 8th lowest among the states.  However, over the past six months, the national unemployment rate has dropped 0.5 percentage points, while Oklahoma’s rate has remained unchanged.

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The latest edition of our monthly Numbers You Need bulletin reports on the most recent state personal income data that was put out last month by the Bureau of Economic Analysis. In the 1st quarter of 2010, state personal income grew by a healthy 0.9 percent in both Oklahoma and the nation, showing the strongest rate of growth since the 2nd quarter of 2008. Personal income grew in all but two states (North Dakota and South Dakota), with Mississippi leading the way (+1.6 percent). Oklahoma’s growth for the quarter ranked 28th among the states.

As can be seen in this chart, state personal income remains slightly below pre-downturn levels. Oklahoma’s  state personal income of $131.2 billion in the 1st quarter was 99.2 percent of the amount in the 3rd quarter of 2008 (amounts are seasonally adjusted at annual rates).  While state personal income for the nation as a whole declined more sharply than in Oklahoma during the worst of the recession, it, too, has recovered to just over 99 percent of pre-downturn levels.

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Last March, we ran a blog post we titled “Kill the drill” commenting on a front-page  New York Times story on the  steep drop in drilling activity that accompanied plunging oil prices and gas prices in early 2009. The Times declared that, “The great American drilling boom is over,” and concluded that with prices plummeting, “the result for companies is that it is becoming unprofitable to drill.” The Times quoted Oklahoma’s Devon Energy as Exhibit A of the drilling hangover era:

“The big bonanza is over,” said Jay Ewing, the completion and construction manager for Devon Energy in the Barnett Shale field here, where so far this year his company has brought its rig count from 35 to 8. “Everyone is really shocked how fast everything has turned.”

Energy experts and company executives warn that oil and gas companies now cutting back on investments will be unable to respond quickly to a future economic recovery. John Richels, Devon’s president, said that if the slump lasted two years, it could then take 18 to 24 months for companies to reassemble rig crews.

We reproduced the Times’ chart showing “a precipitous decline in oil and gas drilling”: Read the rest of this entry »

The latest Numbers You Need, our monthly bulletin of key economic and budget trends and data, reflects continued, if modest, progress on the job front and improved state revenue collections. Previously we reported decent growth in state personal income for the first quarter of 2010.  However, even as the Great Recession starts to recede,  the stubbornly dark cloud in the economic sky continues to be  foreclosures. Read the rest of this entry »

From time to time, we use the OK Policy blog to post submissions we receive from Oklahomans who have interesting perspectives on important policy issues for the state. This entry is from Adam Kupetsky, a resident of Tulsa .

Even after the worst financial crisis since the Great Depression almost sank us into a second Great Depression, some politicians still believe that “no regulation” is the answer.  Regardless of the industry concerned, politicians with lobbyists’ money in their pockets or ideologies to prove correct find reasons to oppose effective regulation and make it possible for free market excesses to reduce our confidence in the free market.

Opposition to regulation in any form is just as radical and crazy as a socialist’s complete opposition to the market.

The truth is that Americans want the market to be left alone when it works and for the government to step in and regulate when the market doesn’t work.  Health care is one example where the market has not worked completely and requires some government regulation of private insurance companies.  Absent some government regulation of health care, insurance companies have shown that they will not provide coverage to those with pre-existing conditions, will impose lifetime spending caps, will deny coverage to the sick and will keep prices unreasonably high. Read the rest of this entry »

Last night my family was discussing the tough times facing public schools in Tulsa and elsewhere. My son, Noah, who’s in the 4th grade, offered one of his favorite jokes (from Jokes for Children, Marguerite Kohl and Frederica Young, 1963):

A little  boy had heard about how crowded the schools were in his city and was discussing the problem with his grade school principal. After listening to the little fellow for a few minutes, the principal said to him, “I think it’s very thoughtful of you, but I don’t really feel that your resignation is the solution to our crowded school problem.”

Noah wants the powers to be to know that should Tulsa Public Schools decide to go this route, he’d accept a very reasonable severance package of two Nintendo game cartridges and a new IPod.

A stark indicator of the extent of Oklahoma’s job losses over the past year is the state’s Unemployment Insurance (UI) Trust Fund account. Going into 2009, the Trust Fund enjoyed a very healthy balance of $824 million. Now, twelve months later, the balance has fallen by 40 percent to $489 million. In 2009, the OESC (Oklahoma Employment Security Commission) paid out $559 million in regular UI  benefits, an all-time record and almost four times the amount paid in 2007.

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Our October edition of Numbers You Need is now out, providing a snapshot of economic and budget trends in Oklahoma through monthly data on jobs, inflation, public benefits, and state revenues, as well as the most recent quarterly data on building permits and an annual update on the poverty rate. Read the rest of this entry »