Agricultural News
Latest Oklahoma Economic Report Shows Oklahoma Jobless Rates still High, but Down Slightly in May
Thu, 25 Jun 2020 10:35:03 CDT
Looking at the Latest Oklahoma Economic Report from State Treasurer Randy McDaniel shows we are living in Interesting times.
"May you live in interesting times." This statement, often cited as an ancient curse, more likely originatedin the early 20th Century. In either case, it has application today. The world, and particularly the United States, is in the throes of a highly contagious viral outbreak. In only
four months, it has claimed the lives of more than 123,000 Americans more than doublethe loss of U.S.lives during theVietnam War. The pandemic, along withcontainment efforts, is having a profound impact on the worldwide national, and Oklahoma economies.
The National Bureau of Economic Research, the official arbiter of economic cycles, has declared theU.S. entered a recession in February. However, much uncertainty remains, primary how long and how deep it will be.
Job losses As of May, the U.S. unemployment rate was listed at 13.3 percent, down from 14.7 percent in April. In Oklahoma, May's jobless rate was set at 12.6 percent, down by 2.1 percentage points from April's rate. The number of unemployed Oklahomans in May was 175,000 more than in early March, when the unemployment rate was reported as 2.9 percent. Oklahoma energy industry Hit particularly hard is the state's oil and gas industry. Initially triggered by a price war between OPEC and Russia, oil prices fell precipitously starting in early March. West Texas Intermediate Crude averaged $50.54 in February, but plummeted to negative territory on April 20 before settling at $19.23 at that month's end. Crude oil has since risen above $37 per barrel, but is still well below the $50 price often cited as the breakeven point for energy companies. Natural gas prices have consistently been listed as below $2 per million BTU since the start of the year.
The U.S. Bureau of Labor Statistics estimates the loss of 4,000 oil field jobs in just the past two months. Mining and Logging Supersector employment, which includes oil and gas jobs, has fallen by 14,300 in the past year. Some energy companies with large operations in Oklahoma are struggling to survive. Government revenue Oklahoma tax revenue has been greatly impacted by current events. This is due to many businesses being shuttered for several weeks, unemployment at levels not seen since the Great Depression, and the energy industry in crisis. Today's tax revenue picture is somewhat distorted due to the delay of the income tax filing deadline from April to July. Nevertheless, 12-month Gross Receipts to the Treasury have dropped by $650 million in the course of two months. The Legislature has enacted modest reductions and appropriated the majority of the balances in its two reserve funds to cover the ongoing downturn with the expectation that the financial picture will improve next year. When will it end? There is no consensus among experts on when recovery will take hold. Until it happens, everyone is watching and waiting as attempts are made to keep the wheels of commerce rolling, even if at a subdued pace. The bond rating agencies are also watching. They know the large influence of the energy industry on Oklahoma's economy will likely mean the state emerges later than others. As with previous downturns, Oklahoma will undoubtedly weather through these interesting times and emerge stronger and better prepared for tomorrow.
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