Falling Oil Prices Pushes Oklahoma into Mini-Recession
Slumping oil prices have fueled thousands of job losses in big energy states like Oklahoma, which is “gripped by a mini-recession,” economist Mark Snead tells the Journal Record‘s Kirby Lee Davis:
“The notion that Oklahoma has diversified away from oil and gas is, at this point, many, many years away,” he said.
Snead, a formerly of the Federal Reserve and Oklahoma State University who founded OKC-based economic firm RegionTrack, says Oklahoma lost more than 9,000 energy industry jobs from December through July. The Oklahoma Employment Security Commission published similar numbers last month, Davis reports:
“We’re still locked in a pretty good downward trend, and given oil is way below $40 a barrel, we are still looking for job losses in the third quarter and fourth,” said Snead, a former economist with the Federal Reserve and Oklahoma State University.
Snead’s data project Oklahoma’s energy sector losing 13,000 jobs in 2015, Davis writes:
That long-term view exceeds a July forecast by OSU’s Center for Applied Economic Research. That report projected Oklahoma would endure 13,000 direct energy industry job losses by the end of 2016. But that was based on IHS Global Insight projections that West Texas Intermediate prices would slip below $50 per barrel by the first quarter, then climb back to $65 by the end of 2016.
At the time of this posting, U.S. oil was trading for $38.24. Snead thinks oil futures are likely to rebound early in 2016, but he also expects the next wave of energy industry job cuts to hit white-collar workers:
“They will be among the highest wage jobs in the industry and they will be located more frequently in metropolitan areas.”
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