Federal Bank report shows slowdown in region’s energy sector


A new Federal Reserve Bank report from Kansas City indicated the energy sector in the 10-state region that includes Oklahoma slowed slightly for the week ending January 27.

Crude oil prices, both WTI and Brent, were down 8.6% and 7.6% respectively over the last quarter. Henry Hub natural gas spot prices were down nearly 40% in the past three months.

The number of U.S drilling rigs was also down 1% from a month earlier and U.S. crude oil production declined 0.3% from a month ago. However, production managed a 3.1% increase from three months earlier, according to the Tenth District repo

Energy activity declined slightly as three oil and gas rigs came offline in December relative to the previous month. Tight
labor market conditions persisted even as hiring slowed slightly. The unemployment rate ended the quarter at 3.1%, below the national average of 3.5%, and roughly 67,000 jobs were added during the quarter.

Job gains were led by the manufacturing and leisure and hospitality sectors. A few sectors experienced slight declines in employment, namely, retail, transportation and information.

Nominal personal incomes increased by 5.9% year-over-year, but real incomes, adjusted for inflation, declined by 0.3% due to rising prices. Home prices increased 10.9% year-over-year in the third quarter, but continue to decelerate from historically high rates of growth. Housing permits declined by 46.4% and 41% for single family and multifamily homes, respectively.