An economist with the Federal Reserve Bank of Kansas City said economic
activity has leveled off in the state but remains solid.
Chad Wilkerson, vice president and Oklahoma City Branch executive, said employment levels statewide remain above pre-recession levels because of job growth in Oklahoma City. Employment levels in rural parts of the state, however, have dipped below pre-recession levels primarily because of a slowdown in the energy sector.
Wilkerson, who was in town Thursday to address a Rotary Club luncheon, said data collected specifically for Muskogee show job growth here "has been slightly lower recently but better than a decade ago." He attributed part of that job stagnation here on the federal sequestration that has impacted Oklahoma communities with significant ties to defense and other public sectors.
"Sequestration is a big concern in a number of places across Oklahoma, particularly in the military cities," Wilkerson said, noting the large number of federal jobs at various agencies with offices in Muskogee. "But with the total government spending situation and possible cuts, that does make it more of a risk here than in other places."
Most of the data presented by Wilkerson presented a historical view of the national, state and local economies. After the luncheon, Wilkerson said he projected "fairly solid growth" at the national level, saying most of the effects of sequestration "are winding down" and the Fed's "monetary policy is still accommodative."
A prolonged economic slowdown in Asia is "one thing that might throw a wrench into that." Another factor that could erode the "momentum starting to build in the economy," Wilkerson said, is a federal shutdown being advocated by some members in Congress who oppose the health care reforms of the Affordable Care Act.
"We've seen the last few years (that) fiscal policy surprises generally have had a negative impact on the economy because of uncertainty -- if nothing else -- about what decisions businesses can make on that," Wilkerson said. "In terms of what the longer term impact of the fiscal changes that are the intent, I think, of the folks who are pushing them remains to be seen."
Wilkerson said in the short term, things like a threat to shut down the federal government "tends to cause disruptions to the economy." During the course of the long term, Wilkerson said he is hopeful the economic momentum he sees "would be able to absorb most of" any shock resulting from a government shutdown should that actually occur.
Reach D.E. Smoot at (918) 684-2901 or firstname.lastname@example.org.
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