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29 Jan 2016
US: Limited oil-sector spillover to non-oil jobs – Goldman Sachs
FXStreet (Delhi) – Alec Phillips, Research Analyst at Goldman Sachs, suggests that the spill over from energy-sector job losses may be weighing on non-energy employment, but we expect that the effect should be limited to no more than -20k to -25k per month, on top of energy-sector job losses in the 10k per month range.
Key Quotes
“Although prior downturns in the energy sector suggest the possibility of a larger spillover effect, the effects seen to date appear to be at the very low end of a range of estimates.
Energy-sector job losses have, thus far, had a relatively small effect on overall payroll growth over the last year, subtracting roughly 114k on a year-on-year basis through December. During the period of greatest decline in energy employment in early 2015, the sector—defined here as “oil and gas extraction” and “support activities for mining”—subtracted around 15k to 20k on a monthly basis compared with the average monthly payroll gain in the sector in 2014.
A common concern among market participants has been that declining oil prices would lead to renewed weakness in energy employment, and that such weakness could spill over to other parts of the labor market.”
Key Quotes
“Although prior downturns in the energy sector suggest the possibility of a larger spillover effect, the effects seen to date appear to be at the very low end of a range of estimates.
Energy-sector job losses have, thus far, had a relatively small effect on overall payroll growth over the last year, subtracting roughly 114k on a year-on-year basis through December. During the period of greatest decline in energy employment in early 2015, the sector—defined here as “oil and gas extraction” and “support activities for mining”—subtracted around 15k to 20k on a monthly basis compared with the average monthly payroll gain in the sector in 2014.
A common concern among market participants has been that declining oil prices would lead to renewed weakness in energy employment, and that such weakness could spill over to other parts of the labor market.”