While economists argue about whether or not the nation is actually in a recession, people living in southern Oklahoma are like other Americans, struggling to keep their financial houses in some semblance of order.
“I’m paying more money for gas, food, bills and everything,” Bettenia Wright said, who lives with her father in Milo.
“It’s hard. Stuff I don’t really need, I don’t get.”
A variety of factors have contributed to the country’s general economic malaise — record gasoline prices, high grocery bills, a weak dollar, falling home values, stagnant wages and rising rates of inflation and unemployment. Medical and health insurance bills are rising, as well.
* Oil Prices
Skyrocketing oil prices have sent the cost of gasoline through the roof. Crude oil was trading at $143 a barrel on July 2.
And oil prices have surged from $55 a barrel to more than $140 since the beginning of 2007.
Gasoline prices hit a new high ahead of the July 4 holiday weekend, increasing to $4.092 a gallon on average, according to AAA. That’s approximately 40 percent higher than a year ago.
AAA reported the price of a gallon of regular gasoline had fallen to an average of $3.787 on Aug. 13. While that is almost 8 percent lower than the July highs, it is still 37 percent higher than last year.
Rising oil prices are mainly the result of increased global demand, primarily in China and India, and other commodities, such as copper, steel and corn, have shown similar price increases.
* Food Prices
The price of groceries has risen about 6 percent this year in the United States. Milk prices have increased more than 25 percent and, although other items haven’t been affected quite so severely, ground beef, chicken, eggs and coffee are more expensive today than a year ago.
High food prices are the result of several factors, including expensive gasoline and fertilizer, bad weather and increased demand in developing countries. Global food prices are so high, they triggered riots earlier this year in some poor countries.
*Housing Crisis
A downturn in the housing market has hit homeowners hard, and billions of dollars in home equity have vanished. Home values fell almost 15 percent in the last year, according to the S&P Case/Shiller Home Price Index.
The number of foreclosures, which rose to more than a million in 2007, is predicted to be even higher in 2008. Although the state’s foreclosure rate has been below the national average,
Oklahoma had 1,743 foreclosure filings in April, which is more than 50 percent higher than a year ago.
So far, the Ardmore area –– indeed Oklahoma as a whole –– has avoided the mortgage crunch. But indirectly, it’s becoming harder to get a loan and interest rates are going up across the board, even in places like Ardmore where the housing industry is still relatively solid.
* Inflation
Inflation, which is a rise in the price of goods and services, is back primarily because of soaring gas and grocery prices. Money doesn’t go as far when inflation is rising, and everyone has to make due with less purchasing power.
The consumer price index is up 4.2 percent since last May, according to the Bureau of Labor Statistics, although core inflation (inflation without food and energy) is still relatively low. Inflation has averaged about 3 percent a year during the past 80 years, but there have been periods where the rates have been higher.
* The Stock Market
As of July 1, the Dow Jones Industrial average was at 11,350, almost 20 percent below its October 2007 high. It had risen a bit by Aug. 12 to 11,642.47. The U.S. stock market has lost $2.1 trillion in value since Jan. 1, including a $1.4 trillion loss in June. Why worry about it? Most people have retirement funds that are linked to mutual funds and stocks, both of which have taken a beating during the current economic downturn.
* Unemployment
The national jobless rate spiked to 5.5 percent in May, which marked the biggest over-the-month increase in two decades and left the rate at its highest since October 2004. The unemployment rate held steady at 5.5 percent in June, but rose to 5.7 percent in July, according to the U.S. Labor Department.
Because of a much healthier economy, the job picture is much better in Oklahoma than in many parts of the country. Oklahoma’s unemployment rate rose from 2.9 percent in April to 3.5 percent in May.
* Wages
Workers saw modest wage gains in June. Average hourly earnings rose to $18.01, a 0.3 percent rise from May. During the past year, wages have grown 3.4 percent, the smallest annual increase since January 2006. Many workers are finding their paychecks aren’t increasing fast enough to cover zooming food and energy prices.
The Census Bureau reported that median incomes for working-age families were down for the fifth straight year. In 2006, one in four workers made less than $8.70 an hour.
* Health Care
Nan Mooney, author of “(Not) Keeping Up With Our Parents,” reported that family health insurance premiums have risen 87 percent since 2000. As of 2006, 61 percent of the population had employer-provided health insurance, down from 69 percent in 2000. According to the U.S. Census Bureau, 47 million Americans don’t have any health insurance.
Oklahoma families saw their median income rise just more than 5 percent from 2002 to 2005. In contrast, the average cost of their health insurance premiums rose 50 percent. More than 30 percent of Oklahomans have no health insurance, giving the state the highest rate of uninsured in the nation, according to a CDC survey.
* Ardmore’s Economy
Showing Strength
Ardmore received high marks in the strength of its economy in a study recently released by a national independent research firm. The city’s ranking has improved steadily since 2006.
The City of Ardmore reported an increase over 2007 in the number of building permits issued through May. The value of those permits have increased from $25 million in May 2007 to $83.5 million in May 2008. Retail sales are higher than a year ago, and the real estate market is stronger compared to May 2007.
Ardmore’s unemployment rate is so low, employers have consistently complained they an unable to find enough qualified workers. A spokesman for 1-800-Flowers said the company is closing its call center because it couldn’t find enough people to work during peak holiday periods.
* Looking Ahead
Some economists fear that once the positive effect of taxpayer stimulus checks fades, the country’s economy could be in for another rough patch.
Goldman Sachs analyst David Kostin predicted economic growth during the next year will be “anemic,” as unemployment expands and gasoline and food prices continue to climb. June’s unemployment rate was significantly higher than the 4.6 rate last year. Nationally, unemployment is expected to climb throughout the rest of this year. And inflation could easily go higher, economists say.
“Americans work more hours than the Europeans or the Japanese, and have gone deep in debt,” former Secretary of Labor Robert Reich told NEWSWEEK. “I don’t think recovery from this recession will be vigorous.”
Eight in 10 Americans believe high gas prices will be a long-term problem, according to a USA TODAY/Gallup Poll.
“It’s affecting everyone. You have to do a lot of compromising,” Ardmore resident Liz Cryer said. “You have to do without more things — especially when you have children. You have to teach your children how to compromise.”
The Associated Press contributed to this report.
Steve Biehn, 221-6546
steve.biehn@ardmoreite.com
Monday: Motorists may be outraged by the price of gasoline these days, but imagine if you were a long-haul trucker or farmer. Diesel has consistently been 20 to 30 cents higher per gallon than gasoline over the past half year, causing trucking companies to cut back, farmers to go into debt and pushing delivery costs for everything from tomatoes to televisions through the roof. Plus, higher travel and gasoline costs means people cutting back on vacations.
