Oklahoma economy showing strain

Josh Kelly

The Oklahoman USA TODAY NETWORK

Unemployment rises and spending slows

Earlier this spring, the poorest 80% of Oklahomans were feeling the greatest pinch of inflation, all while employment numbers remained unchanged. Now for the first time since the pandemic, economic experts say the state’s unemployment rate is beginning to creep above the national average. Cortney Cowley, assistant vice president for the Kansas City Federal Reserve, said that in the years following the pandemic, Oklahoma’s unemployment rate consistently remained

Customers shop for collectibles during the grand opening of ThinkGeek at Penn Square Mall in Oklahoma City.

CHRIS LANDSBERGER/THE OKLAHOMAN

below the national average.

In 2020, the nation saw an unemployment rate of 14.8%, which has steadily decreased. By August 2026, the national unemployment rate stood at 4.1%.

However, Oklahoma is one of 20 states with a rate of unemployment above that average, at 4.3% in August 2026.

At the top are California (5.1%), Oregon (5.1), Connecticut (5.1), Michigan (5), and Washington, DC (5.7).

With a labor force of nearly 2 million, more than 85,000 Oklahomans were unemployed that month, according to the Oklahoma Employment Security Commission.

For Cowley, who also manages the Federal Reserve’s Oklahoma City branch, the uptick in unemployment is one of the clearest indicators to watch when assessing the state’s economic health.

“We’re finding that part of it is actually that there are more people re-entering in that prime age category. So as they come back into the labor force and things like job openings and hiring rates stay constant, [having] more people come in can drive your unemployment rate down if there aren’t immediate jobs for them,” Cowley said.

From June to July, only 18 counties reported no change or a decrease in unemployment. Even among counties that reported improvement, unemployment rates generally remained above the national average.

The state’s largest population centers, Oklahoma County and Tulsa County, remained above the national average at 4.4% and 4.6%, respectively. Counties in the southeastern part of the state saw the highest unemployment rates, with Love, Hughes and McIntosh counties all reporting unemployment rates of at least 7% in July 2026.

Unemployment rates are found by comparing the number of people looking for a job against the number of jobs available, Cowley said. Those two numbers often move in tandem, but recently, however, that balance has shifted.

According to the Federal Reserve’s Beige Book, many employers say ongoing labor shortages, particularly among skilled workers, are preventing them from adding jobs and expanding operations.

“While shortages of skilled workers remain particularly acute, reports of hiring difficulties broadened across occupations and industries, with several firms operating below their optimal staffing levels,” the book’s September 2026 edition reads.

Signs of strain emerge in consumer spending

Consumer spending declined slightly throughout the Tenth District, which includes Oklahoma, Colorado, Kansas, Nebraska, Wyoming and part of western Missouri.

Across the six-state region, the World Cup provided a temporary boost during the summer. However, spending slowed at restaurants, hotels and discretionary retail stores as consumers increasingly relied on credit cards to cover essential expenses between paychecks.

Cowley said wages increased nominally but showed little to no growth after accounting for inflation.

“Which caused more stress, particularly in the middle and lower-income earners,” Cowley said.

Cowley pointed to the University of Michigan’s consumer sentiment survey, which found that more than 71% of middle- income Americans felt they were falling behind the cost of living.

“I think part of that could be that wage-compared-to-inflation part,” Cowley said. Rising gasoline prices have also added to financial pressures on low- and moderate-income households, particularly in rural areas. The Beige Book states that some consumers are increasingly using alternative transportation and reducing trips, including medical appointments.

Cowley also said the personal savings rate has fallen as consumers save less and spend more despite relatively flat inflation-adjusted wage growth.

As the third quarter comes to a close and attention turns to the year’s final three months, Cowley said the economy looks similar to where it stood at this time last year. In 2025, there was a sense of pessimism going into the holidays.

“And then we had one of the strongest holiday seasons that we’ve ever seen, so I guess we will see what happens, but it does feel like what’s happening with consumer debt and consumer spending outside of the wealthiest category is slowing,” Cowley said.

“It’s about how long the wealthiest 10th percentile in the country can carry all of us?”