At this time last year, the putative judgment by economic
prognosticators was that 1999 would not be a very good year. Asian
economic problems were expected to squelch the nation's economic
vitality. Even Federal Reserve Chairman Alan Greenspan was quoted as
saying that the U.S. economy could not expect to remain an island of
prosperity in a sea of economic turmoil, or words to that effect. He
even lowered interest rates three times to signal a more relaxed
attitude toward inflation. Many national forecasting services were
even predicting a couple of quarters of near zero growth in gross
domestic product in 1999.
Instead of the expected turmoil, the national economy marched
decidedly ahead. The economy grew in real terms by 3.7, 1.9, and 4.8
percent in the first three quarters and is expected to turn in a 3.7
percent annualized growth rate in the fourth quarter. Nationally
about 2.7 million payroll jobs were added, a 2.3 percent gain, and
personal income is advancing at a 5.4 percent pace in recent data.
All doubts about the future seem to have been cast aside.
Consumers are flooding the malls and investors are bidding up any
dot.com stock they can find to unimaginable heights. Y2K, we will
soon find out, will prove to be the nonevent of the year, if not the
decade, though it was sure fun to worry about while it lasted.
This year marks the first full year that the Price College
Indicators (PCIs) have been available to the public. These leading
indicators are available for national employment, the core rate of
inflation, and for Oklahoma and its two major metropolitan areas.
The indicators behaved quite well in foreshadowing activity,
generally signaling that a slower pace of growth was expected, but
not substantially slower, and that inflation would remain quite
Presently, the PCIs are all hovering slightly above 50,
indicating these favorable trends should continue. The PCIs are also
used in forecasting for each of its categories, and the forecasts
seem to have worked well this past year, too.
With the doom and gloom on the national economy, forecasts for
which are inputs to the forecasts of the PCI categories, it is not
surprising that the nation and the state's economy did a little
better than we thought at this time last year. Oklahoma in
particular seems to be turning in very stable employment growth,
with an expected 2.5 percent rate of growth in 1999, matching its
1998 growth rate. The state rate of growth is expected to decline
moderately to 2.2 percent in 2000 and 1.8 percent in 2001.
Tulsa continues to be a star performer with a 3.3 percent growth
in 1999, but even its stellar performance should decline modestly to