The sustained drop in the price of oil and a recent population trend reversal in New Mexico signal that the state’s economy could continue to lag well behind the national recovery trend, with employment numbers that have yet to return to pre-recession levels.
Economists will examine the reasons behind the lag and their forecast for the coming year during the fifth annual Economic Outlook Conference hosted by New Mexico State University and Wells Fargo on Thursday, Feb. 18, at the Las Cruces Convention Center, 680 E. University Ave. Experts will also discuss national trends and how they might affect New Mexico’s economic future.
Eugenio Aleman, a director and senior economist at Wells Fargo, said the U.S. economy has started on the path to higher interest rates, and markets seem to be second-guessing December’s decision by the Federal Reserve to raise rates for the first time in nine years. Global economic news is also affecting markets, he said.
“The stock market has started the year on a down note as news from the global economy continue to point to weakness, especially in China,” Aleman said. “Markets are trying to gauge the number of interest rate hikes during this year, and the energy market continues to readjust to low petroleum prices while the U.S. consumer continues to enjoy the benefits of low gasoline prices.”
The U.S. labor market continues to grow, Aleman said, with strong jobs numbers in December nationally – but he cautions that growth in the U.S. economy will remain constrained.
Jim Peach, Regents Professor of economics, said the job growth seen at the national level simply hasn’t translated to New Mexico, due to a number of factors he’ll examine at the conference.
“Oil prices have declined from $100 per barrel to the low $30 per barrel range over the last 18 months, but oil production in New Mexico has not yet decreased,” Peach said. “That has implications for the industry, the broader economy and state revenue. It also brings up fascinating questions about the effects of lower gasoline prices on consumer behavior in New Mexico.”
Peach will also explore the implications of recent population trends in the state.
New Mexico is traditionally a state with high population growth rates, he said, but according to Census Bureau estimates, New Mexico has lost population for the last two years.
“This is the first time in nearly 50 years that the state has lost population,” Peach said, “so we’ll discuss economic implications of the loss of population and whether or not this might be a long-term trend.”
The Economic Outlook Conference began in 2012 as a way to help area residents and business professionals gain a better understanding of the region’s economic climate. The NMSU College of Business hosts the conference in partnership with Wells Fargo Bank, the state’s largest bank by deposits, with locations in 49 New Mexico communities.
“The Las Cruces business community continues to benefit from the rich insights, commentary and networking opportunities this event provides,” said Yolanda Garcia, Wells Fargo Southwestern New Mexico area president. “Dr. Aleman is a highly sought-after speaker and we’re pleased to welcome him back to Las Cruces as he joins NMSU’s Dr. Peach once again. Wells Fargo is also proud of our continuing support to NMSU and the community.”
The free conference kicks off with a reception at 9:30 a.m. Feb. 18, followed by the economists’ presentations from 10 to 11:30 a.m., all at the Las Cruces Convention Center. Event registration is available online at http://business.nmsu.edu/events or by phone at 575-521-6849.
Information from NMSU