Fed official discusses economic outlook for U.S., Oklahoma

The United States' economy is extremely resilient overall, but the growth supporting it is uneven, said Cortney Cowley, assistant vice president and Oklahoma City Branch executive of the Federal Reserve Bank of Kansas City.

Much of the consumption that the Fed is seeing is driven primarily by the top 10% of earners, Cowley said. She said Fed officials have reported a gap between the growth in spending by consumers in that group and people on the next level, which is made up of people who earn high incomes but are not in the top tier.

"And then you get to the low- and middle-income consumers," she said. "They're really only increasing their spending if they have to."

Cowley discussed the economic outlook for the United States and Oklahoma during the Lawton Fort Sill Chamber of Commerce's State of Finance Luncheon, which took place Wednesday at the Apache Casino Hotel.

The national outlook

The United States' gross domestic product grew by only 2% in the second quarter of 2026 as business investment eased, according to the Fed. But consumption remains strong, fueled by consumer spending from high-income earners and investment in tech-related areas.

The Fed expects inflation to remain elevated this year amid rising energy prices and broad, persistent inflationary pressures, Cowley said. She said tariffs on imported goods are still high, but businesses are not expected to keep raising their prices so they can pass those costs on to consumers.

"The closer they are to consumers, the less ability they feel that they have to pass on price increases," Cowley said. "Services firms understand the law of demand that if you increase prices, demand declines."

She said firms may be taking advantage of higher profit margins, which makes them less likely to pass tariff-related costs on to consumers.

Labor market

There seems to be more certainty in the national labor market, at least on the surface, Cowley said. She said the national unemployment rate has reached its long-run average and is expected to remain low moving forward.

However, she said, companies are hiring fewer workers these days.

"On the demand side, we're seeing less demand for workers," Cowley said. "Hiring rates have declined pretty dramatically in the U.S. and in Oklahoma overall."

Oklahoma's unemployment rate

Turning to Oklahoma, Cowley said the state has recovered the jobs it shed in 2025. But, she said, Oklahoma's unemployment rate remains higher than the national average.

"For years – about two decades – we had an unemployment rate below the national average for most of that time," Cowley said. "And here in recent months, our unemployment rate has shot up."

She said new work requirements for participants in the federal Supplemental Nutrition Assistance Program and Medicaid are pushing more people to reenter the workforce, but they aren't finding jobs when they get there.

"I think that right now, that's really the most important thing that we're seeing in Oklahoma's labor market," Cowley said.

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