Center for Applied Economic Research
Tulsa Economic Outlook 2025
by
Dan Rickman
and
Hongbo Wang
Center for Applied Economic Research
Spears School of Business
Oklahoma State University
December 23, 2024
240 College of Business, Stillwater, OK 74078
Summary
Tulsa Metro employment has steadily grown since the end of the pandemic (Figure 1), indicating consistent job growth. However, with expectations of a slowing national economy, it is forecast that this growth will plateau in 2025, with a decline anticipated in the final quarter of the year. A general national slowdown has been anticipated due to the economy reaching full employment and the impact of higher interest rates. The expected imposition of trade tariffs and deportations of undocumented immigrants are forecast to significantly further slow economic growth across the nation.
490
7
6
480
5
470
4
460
3
450
2
440
1
430
0
420
-1
%Change-Annualized Tulsa Total Nonfarm Employment (thousands)
Figure 1. Tulsa Employment Growth (History 2024Q3)
Long-Run Forecast Comparison
As shown in Figure 2, after robust growth in 2022 and early 2023, growth began to moderate both locally and nationally, with further slowing of growth in 2024. The forecast includes growth turning negative, with slight employment declines expected through 2027 both locally and nationally. Despite this trend, Tulsa Metro employment growth is predicted to outpace national growth. However, Tulsa County employment is expected to lag both the metro and the nation. There is considerable uncertainty though related to policy and world events. The forecasts in Figure 2 incorporate expectations for the imposition of additional tariffs on imports and reduced net international immigration, as discussed below.
1.12
1.1
1.08
1.06
1.04
1.02
1
US Nonfarm Employment Tulsa Nonfarm Employment Tulsa County Nonfarm Employment
Figure 2. Long-Run Employment Growth Comparison (2022Q1=1) Source of U.S. Nonfarm Employment Forecast: S&P Global Inc.
Expected Change in Policy Environment
Our source of national economic forecasts, S&P Global Inc., expects that the imposition of tariffs and the deportation of undocumented immigrants will increase prices, slow economic growth, and increase unemployment. S&P Global Inc. assumes a 10% tariff on all imports and a 30% tariff on imports from China, with tariffs taking effect in the second quarter of 2025 and becoming fully implemented over four quarters. Deportations and border enforcement are projected to reduce net international migration by five hundred thousand per year for the next four years. Consequently, the Federal Reserve is expected to pause its easing cycle in mid-2025, weakening demand in the short term. A reduced immigrant population is forecast to decrease consumption demand, housing demand, and housing supply. Figure 3 illustrates S&P Global’s forecast of the percentage differences in key US variables resulting from the imposition of additional tariffs and reduced international immigration. Over the next two years, US employment is expected to decrease by approximately 0.5%. The consumer price index (CPI) is anticipated to rise by over 2%. Although nominal wages and salaries are expected to increase, they are not projected to keep pace with the rise in prices, leading to a decrease in real wages and salaries of about 1%.
3.00%
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
-0.50%
-1.00%
-1.50%
-2.00%
-2.50%
US Real Wages and Salaries
US Nonfarm Employment
US CPI
US Nominal Wages and Salaries
Figure 3. Forecast Policy Effects on Key US Economic Variables
0.6%
0.4%
0.2%
0.0%
-0.2%
-0.4%
-0.6%
-0.8%
US Nonfarm Employment
Tulsa Metro Nonfarm Employment
Tulsa County Nonfarm Employment
Figure 4. Comparison of Policy Effects on Employment
Figure 4 compares the predicted policy effects on employment for the nation, the Tulsa Metro, and Tulsa County. Initially, the predicted employment losses are slightly larger for the nation. During an intermediate period, the predicted employment losses are greater locally, while in the long run, the predicted losses again are greater for the nation. The maximum employment loss for the Tulsa Metro approximately reaches 0.6 percent.
Summary Table
Table 1 shows the annual growth rates of key economic measures for the nation, Tulsa Metro, and Tulsa County for 2022 through 2025. From the table, we see slowing growth both nationally and locally across the economic indicators from 2023 to 2024, with forecasts of further slowing of growth in 2025. We also see consistently rising unemployment rates each year both nationally and locally, which is expected to continue in 2025.
Forecast Risks
There are many risks to the forecast, both to the upside and downside. Sluggish economic growth continues to plague China, reducing world demand, including for oil. Geopolitical events continue to pose risks to the world economy. The newest and source of uncertainty though is political with the election of Donald Trump as president. S&P Global Inc. identifies three major areas of uncertainty. First, is the uncertainty surrounding tax policy. Permanent extension of the
Table 1. Key Tulsa Economic Indicators (Last Historical Period: 2024Q3 for Tulsa and U.S. employment and unemployment, U.S. income, and U.S. real GDP; 2024Q2 for Tulsa County employment. 2023 for Tulsa Metro real GDP and income) Economic Indicator 2022 2023 2024 2025
2.90
3.19
1.86
0.73
Tulsa Metro Nonfarm Employment
2.83
1.79
1.09
0.36
Tulsa County Nonfarm Employment
4.28
2.32
1.61
0.87
U.S. Nonfarm Employment
3.15
3.24
3.58
3.90
Tulsa Metro Unemployment Rate
3.05
3.20
3.49
3.77
Tulsa County Unemployment Rate
3.65
3.64
4.03
4.44
U.S. Unemployment Rate
10.20
5.62
3.94
3.04
Tulsa Metro Nominal Personal Income
3.13
5.95
5.47
5.16
U.S. Nominal Personal Income
8.14
7.03
4.43
4.07
Tulsa Metro Nominal Wages and Salaries
7.01
5.61
6.01
5.61
U.S. Wages and Salaries
0.95
4.44
3.38
1.94
Tulsa Metro Real GDP
2.51
2.89
2.72
1.91
U.S. Real GDP
0.80
1.04
0.93
1.03
Tulsa Metro Population
0.70
1.05
0.99
0.62
U.S. Population
personal tax provisions in the Tax Cuts and Jobs Act is part of the S&P Global’s baseline forecast. Other changes discussed by the incoming administration are not part of the baseline forecast and if they were enacted would boost near-term GDP growth, reduce the projected path of the unemployment rate, and raise inflation. The second source of uncertainty is the proposal of a 60 percent tariff on imports from mainland China and 10 to 20 percent on imports from the rest of the world, which exceed those assumed in the baseline forecast. The third major area of uncertainty is the prospect of mass deportation of millions of undocumented immigrants that exceeds the baseline assumption of a reduction of five hundred thousand net international immigrants per year. If the baseline tariffs and deportations are exceeded, the expected result would be slower economic growth, higher unemployment, higher interest rates, and a higher rate of inflation.
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