Tags: job | losses | economy | energy

March Job Losses Widespread, Led by Slump in Energy

Tuesday, 21 April 2015 01:37 PM

Payrolls dropped in 31 U.S. states in March, led by a slump in energy producers such as Texas and Oklahoma. The unemployment rate fell in 23.

Payrolls in Texas decreased by 25,400, its first decline since September 2010 and the biggest since August 2009, figures from the Labor Department showed Tuesday in Washington. Oklahoma followed with 12,900 fewer jobs and employment in Pennsylvania fell by 12,700.

The plunge in fuel prices that began in the middle of 2014 has caused oil drillers and miners to cut workforces, prompting reductions among industries in the region. Rough winter weather at the start of the month could have led to job losses in other parts of the country.

“The oil-price plunge is creating pain for some states and gains for most,” said Neil Dutta, head of U.S. economics at Renaissance Macro Research LLC in New York. It “represents the transfer of income from oil-producing states to oil-consuming ones.”

The number of states showing a drop in employment last month was the highest since September 2010. The decrease in payrolls in Oklahoma was its worst performance since April 2009. Pennsylvania, which is the second-largest producer of natural gas in the U.S., had its biggest decline in almost three years.

The setbacks weren’t limited to major energy producers, with states such as Georgia, Maryland and Missouri also showing a decrease in payrolls.

Job Gains

Among the 18 states showing gains, California led the pack with a 39,800 increase in employment and Florida followed with a 30,600 advance. These are examples of the oil-consuming areas that would benefit from the lower fuel costs, said Dutta.

Oregon and Washington posted the biggest statistically significant drops in joblessness last month, each with a 0.4 percentage point decline. West Virginia had the largest increase, jumping 0.5 point.

The difference between the state with the lowest jobless rate and the one with the second-lowest widened last month. The unemployment rate in Nebraska declined to 2.6 percent, its lowest in 16 years, while it climbed to 3.1 percent in North Dakota as that state also suffered from the energy slump.

Nevada had the highest jobless rate in the country, at 7.1 percent, followed by Mississippi at 6.8 percent.

Even with the oil-related cutbacks in positions in Texas, the state’s jobless rate dropped to 4.2 percent in March from 4.3 percent.

Oil Price

Crude lost almost 60 percent of its value since late June, making some shale fields unprofitable to develop and forcing companies to cut back exploration prospects. Oil explorers were forced to shut down more than half the rigs drilling for crude in the U.S. since late 2014, and canceled expansion plans to conserve cash.

Hiring gains helped California’s unemployment rate to fall 0.2 percentage point to 6.5 percent, the lowest since March 2008. Growth in the state’s technology sector is spurring jobs in other industries too, Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, said before the report.

In Florida, warmer weather and low gasoline costs helped to boost hiring in tourism-related industries such as leisure and hospitality, and retail, Vitner said.

State and local employment data are derived independently from the national statistics, which are typically released on the first Friday of every month. The state figures are subject to larger sampling errors because they come from smaller surveys, thus making the national figures more reliable, according to the government’s Bureau of Labor Statistics.

Compiling the state figures showed a 29,000 decline in employment in the U.S.

March Payrolls

The national report, released on April 3, showed payrolls climbed by 126,000 workers in March, following a 264,000 gain the prior month. The U.S. jobless rate held at 5.5 percent, the lowest level since May 2008, and worker earnings improved.

In the nationwide tally, job cuts last month spanned goods producers including factories, construction firms and the industries that support oil and gas well drilling, while manufacturing payrolls fell for the first time since July 2013.

Along with falling oil prices, the surge in the dollar, weaker foreign demand, and lingering delays in shipments from West Coast ports have taken a toll on factories.

Manufacturing output rose 0.1 percent in March, marking the first advance in four months, Federal Reserve data showed April 15. Total industrial production, which also includes utilities and mining, fell by the most since August 2012.

Disappointing Data

A string of disappointing data in recent weeks is among reasons economists forecast Fed policy makers will be in no rush to raise their benchmark interest rate. Most analysts now project the central bank will increase the rate in September rather than in June.

The strength of the job market and the economy remain on the radar screen of Fed officials.

“It will be important to determine whether the softness in the March labor market report was temporary, or if it foreshadows a more substantial slowing in the labor market than I currently anticipate,” Federal Reserve Bank of New York President William C. Dudley said Monday at the Bloomberg Americas Monetary Summit in New York. “The timing of normalization remains uncertain because how the economy evolves is also uncertain.”

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Payrolls dropped in 31 U.S. states in March, led by a slump in energy producers such as Texas and Oklahoma.
job, losses, economy, energy
Tuesday, 21 April 2015 01:37 PM
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