Newspaper article THE JOURNAL RECORD

Forecast Gets Cloudy after Strong `99

Newspaper article THE JOURNAL RECORD

Forecast Gets Cloudy after Strong `99

Article excerpt

Last year at this time, the University of Oklahoma Center for Economic and Management Research debuted the Price College Indicators (PCI) series for national employment and inflation. This year we have sought to expand the methodology to Oklahoma and the two major metropolitan areas and to improve upon our forecasting ability through use of these indicators.

The bottom line of this analysis: Economic growth in Oklahoma should remain fairly strong in 1999. In the year 2000, the results are less sanguine.

In previous articles for The Journal Record, I have waxed somewhat philosophically about Oklahoma's development prospects in addition to reporting on various economic statistics and forecasts. While issues of directions to take for economic development in this state are yet to be resolved and remain a keen public policy pursuit, other concerns are mounting. These are generally macroeconomic concerns. Will the Oklahoma economy continue to receive strong growth impulses from the national economy? Will the national economy continue its phenomenal growth pace? Is the crisis in Southeast Asia and Japan over? Will the millennium bug, the so-called Y2K problem, sap corporate coffers, slowing investment spending and drag the U.S. economy into recession? These are just some of the questions we face as we look toward the future. Never can I recall a time when there was so much variation in expectations for the immediate future. Several economists believe -- and have supporting documentation and models for their beliefs -- that the U.S. economy is headed for some trouble in the years ahead. The nation is nearing a new record in consecutive quarters of real economic growth. That fact alone seems to engender some concern. The last recession was in 1990-91, and it was brief. Growth has been solid nationally and there is little evidence that a significant divergence from established growth paths will occur in the immediate future. Still, the concerns mount, attributable to the confluence of continuing international economic problems, the rising U.S. trade deficit, prospects the new European currency may reduce the status of the U.S. dollar as a reserve currency, and the aggregate spending that will be needed on computer programming, software and hardware as we race toward the year 2000. Costs of the Y2K bug range upward of $600 billion, diverting financial and human resources from more productive pursuits. Despite using what turns out to be a rather somber model to forecast the national economic outlook, for reasons explained in a separate article on Page 8, Oklahoma employment growth should remain robust in 1999, although declining from present strong growth rates above 2.5 percent to the 2.1 percent rate. In 2000, the negative rate of change in the growth rate is expected to continue. …

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