Amarillo Not Immune To Recession

In the first week of February, Amarillo mayor Debra McCartt, Chamber of Commerce president Gary Molberg and Amarillo Economic Development executive Richard David appeared on local television to give area residents a picture of the economic climate in Amarillo. To hear these people, one would think Amarillo is immune to the current worldwide recession.

They told us that retail sales were up and about 900 more people were working than at the same time last year. Those figures are a bit disingenuous. The last retail sales figures were for November (a traditionally good month for retail sales). While the sales for November were up by 2.2% over the previous year, this was not a cause for celebration. Until recently, the typical year-to-year growth in retail sales has been around 8%. That's a significant decline.

As for the 900 new jobs, that just seems to have been a lie. According to the latest Bureau of Labor Statistics numbers, there were 700 fewer people employed in Amarillo in December 2008 than in December 2007. In the last month, the unemployment rate has climbed from 3.1% to 3.8%.

Most of the job losses have been in small businesses and therefore under the radar. You just won't see a news article about a small business doing away with 1-5 jobs, but when a lot of these businesses do that (and that is happening) then the effect can be significant.

According to the director of Workforce Solutions, "We had about a 40 percent increase in foot traffic in the Amarillo office in January over December. We had about 6,700 customers in January, which is crazy."

Jobs are even disappearing in the oil and gas industry. A year ago, there were 103 drilling rigs operating in the Panhandle. Today there are only 38 operating. Add to this the fact that Owens Corning has announced they will be laying off 250 Amarillo workers, and it's easy to see the jobs situation will get worse before it gets better.

And the economic mess isn't just hitting businesses and workers. Area farmers and ranchers are also feeling the pinch. According to the Amarillo Economic Pulse, "...cattle operators are losing between $200 and $300 a head. That figure is the largest loss for cattle since the 1970s, while corn prices are off 23 percent from a year ago, cotton is down 34 percent and wheat down 40 percent."

No -- the Amarillo area is not immune to the recession. While the figures may not be as bad as those in other areas of the country, they are getting worse and people are being affected. Only the future will tell us how much worse it will get. But one thing is sure, if our leaders don't pay attention and tell us the truth then it will get much worse than is necessary.

It looks like about $6 million of the federal stimulus will come to this area. Will our leaders spend it wisely? We can only hope.