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Economic Pulse Local economy dodges bullets By Greg Rohloff With each day bringing news of a worsening national economy — Americans getting poorer, oil prices rising higher and employment figures cratering, just for starters this past week — one has to wonder how long Amarillo's economy will dodge the bullets. Some causes in the slump aren't so likely to touch Amarillo, such as the Federal Reserve's quarterly report on the flow of funds that showed Americans were collectively a half-trillion dollars poorer in the fourth quarter of 2007 than the preceding quarter. The prime reason is the continued decline in home prices in the once-hot coastal real estate markets. Amarillo's housing market continued to shine comparatively, according to the February Economic Pulse. It reports that Amarillo had 48 housing starts in the current reporting period, down from 58 a year ago. And while the credit crunch can be blamed for that 17 percent decline, no one is sounding an alarm. Patrick Ware, an assistant vice president at Amarillo National Bank, which compiles the monthly survey, said the 20-30 percent decline in housing prices in some areas is unlikely to strike here. Most likely, housing prices will drop no more than 5 percent in the current downturn, he said. The news that spurred the most talk of a national recession, a decrease of 63,000 jobs in February for the second straight monthly decline in the Labor Department estimate, barely touches Amarillo, which showed a decrease of some 500 jobs from a year ago, from 130,300 to 129,800. That decline translates into an unemployment rate for Amarillo of 3.2 percent, up from a year ago at 3.1 percent. Average weekly wages continue at $644.22 a week, up from $583.96 a year ago. Ware said the rising cost of gasoline is the only concern locally, with prices back over $3 a gallon for self-serve unleaded, and the price of oil setting records at more than $100 a barrel late last week, spurring talk of $200 a barrel oil in the event of an outage such as a major refinery breakdown or a Gulf Coast hurricane wrecking the ports that receive a large portion of imported oil and refined products. What drove the Economic Pulse upward in February to 215.69, up from 200.45 in January and 184.43 in February 2007, is the continued strength in farm commodities. Wheat, cattle, corn and cotton all fetched higher prices in February than a year ago, thanks to strong worldwide demand and falling reserves, and the regional oil and gas economy continues to perk along because of strong demand and high prices for oil and natural gas. Those strengths, though, feed into the main factors in inflation, running at 3.18 percent in Amarillo for the past 12 months, compared with a national average of 4.1 percent. The Pulse cited grocery prices and health care as the major factors in rising prices, while utilities experienced a 10 percent increase during the quarter, the winter heating season. Ware said he was uncertain how quickly rising prices for gasoline will cut into disposable income here. E-mail
comments about this story Posted: March 13, 2008
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