Oil Industry Sees Layoffs, Even As Jobs Numbers Rise Elsewhere

Feb 6, 2015
Originally published on February 6, 2015 10:25 am
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And we talked on this program about one motive President Putin might have for keeping things stirred up in Ukraine - to distract his country's attention from a deteriorating economy caused partly by plunging oil prices. Those falling prices have also slowed drilling here in the U.S., and that's led to layoffs in the energy sector. But this morning, the Labor Department's monthly employment report came out, and it shows that overall, job growth is strong. Here's NPR's John Ydstie.

JOHN YDSTIE, BYLINE: The report showed an increase of 257,000 jobs in January. The unemployment rate did tick up a notch to 5.7 percent, but even that appears to be a positive signal. That's because it was likely driven higher by workers reentering the labor force because they're more confident now about finding a job. In fact, the labor force increased by more than 700,000 people in January. CME Group economist Blu Putnam says the January report was good on almost every front.

BLU PUTNAM: This is a very, very broad-based jobs report, a very good signal for the economy.

YDSTIE: One of the few disappointing areas was a loss of 3,000 jobs in the mining sector. Putnam says that's possibly the leading edge of job losses that will hit the energy sector because of the plunge in oil prices. But he doesn't think that will hurt the broader economy.

PUTNAM: The small job losses that we are probably going to lose over the course of the year in the energy sector will be more than offset by a large factor in the rest of the economy.

YDSTIE: The robust employment market was evident in the January numbers. Construction jobs were up 39,000, health care was up almost that much and manufacturing jobs increased by 22,000. Upward revisions for job growth in November and December pushed the average job creation in the past three months to 336,000 - a very robust pace. And average hourly wages rose strongly, too - up 12 cents an hour. But Putnam cautions that the previous month showed a wage decline.

PUTNAM: If you average the two months, it's basically - we're starting to head in the right direction, which is a little higher hourly wages. But it's still relatively sluggish by historical standards.

YDSTIE: On the positive side, though, Putnam says the number of hours worked is creeping up, and 3 million more people have gained jobs in the past year, so overall income is increased enough to propel the economy forward at a healthy rate. John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright NPR.