Rob:  Well Chad Wilkerson joined the Oklahoma City branch office of the Federal Reserve Bank in January of 2006 as the branch executive.  In this role, he serves as the bank’s regional economist examining issues decidedly Oklahoman.
Chad Wilkerson:  Interestingly some research we’ve done at the fed though shows that rebounds from, especially deep recessions, tend to be fairly simultaneous across the country because of the mass of policy response with monetary and fiscal that don’t tend to be targeted, especially to any one region.
Rob:  I sat down with the head of the Oklahoma Fed and asked if 2010 could turn into an extension of 2009.
Chad:  I think we can expect a little bit more than that, 2009 was a very rough year for the U S economy and also for the Oklahoma economy.  And we’re beginning to see signs of a pick-up, both nationally and even signs of stabilization locally, and so I think we should expect a good amount of recovery, but probably not a great 2010.
Rob:  Are there certain markers that you’re looking for that will indicate that we are picking up?
Chad:  The key one that’s been lagging is employment.  We’re beginning to see increases in output both nationally and in some regional surveys of manufacturing and other measures, the rig count even is increasing, but employment continues to ease.  So, for the recession to really be fully over we’ll need to see employment begin to rise.
Rob:  For the state of Oklahoma in particular, should we be concerned about the continued low price of natural gas?
Chad:  Absolutely.  I think that’s the one area where Oklahoma’s fundamentals are more at risk than in the nation.  For example, our labor market’s in better shape’ our housing market’s in better shape; our manufacturing sector appears to be rebounding with the nation; but of course, the thing that makes us most different from the nation is our reliance on natural gas.  There have been some recent increases in futures prices, and I think the futures path expects prices to get back in the five dollar range by early next year, and that would be good.  But, if that doesn’t happen, that could mean a relatively worse year for Oklahoma next year.
Rob:  In terms of capital for investment, I still hear a lot of people talking about how tight the lending market is.  Can we see a turnaround in that this coming year?
Chad:  I think we’ll see some improvement, the latest numbers from the feds senior loan officer survey came out just a week or two ago and showed continued tightening across a variety of types of loans; not quite as many banks were tightening as in the third quarter, but still a tightening of credit especially for commercial real estate; that’s the sector that really poses a bit of a danger.
Rob:  Let’s expand a little bit out of Oklahoma and into the rest of the country, what do you think 2010 will hold?
Chad:  I think we’ll see a modest to moderate recovery in the U S economy with GDP growing close to its trend rate, long term trend rate probably somewhere in the two to three percent range.  But the thing is, we lost a lot of output during the deep recession, and so we would need faster growth than that to pull the unemployment rate down.  So, I’d expect unemployment to stay relatively high for quite some time; so the recovery will feel fairly modest.
Rob:  And as we recover, can we expect to see a different type of economy in 2010 than say in 2008?
Chad:  I think most definitely we can.  One of the shifts that needs to occur for the U S is for us to have a bit less reliance on the housing and consumer sectors than we had during the boom earlier this decade and more of a focus on the business investments and especially exports side.
Rob:  So Chad, what can John Q. Public expect 2010 to be like?
Chad:  I think a fairly moderate growth path for the overall economy.  As you mentioned already, credit does remain tighter than in the past, partly appropriately so.  So, it’ll be a bit of a, a bit of a struggle in 2010.  The recovery won’t be that rapid, but we will begin, I think, to feel better.