One of the biggest stories over the past few years has been the struggling American energy sector.
The mining and logging industries have been continuously bleeding jobs amid the collapse in oil prices. And wages in oil states have significantly lagged behind those in non-oil states since early 2015.
But there have been a few positive signs as of late.
The US oil rig count has been steadily ticking higher in recent weeks following the slight oil-price recovery in the spring. Domestic oil rigs have increased by about 7.6% from the July reference period to August, according to data from the Bureau of Labor Statistics.
Moreover, the unemployment rate in the energy sector dropped to 5.4% in August, a huge drop from July’s 9.3%, according to the latest jobs report from the BLS. And energy employment is trending higher.
As such, Deutsche Bank’s Chief International Economist Torsten Slok declared in an email to clients that “the negative effects of lower oil prices on the energy sector are behind us.”
He also shared the chart below, which shows energy employment and the unemployment rate for the energy sector. (Mind the double y-axis.)
We should note that Friday’s jobs report also showed that employment in the mining and logging sector continued to fall.
Employment dropped by 4,000 in August, which was the smallest decline in absolute terms this year. However, the report noted that losses were concentrated entirely in mining — the category that includes the oil industry and, more specifically, the oil drillers.
“Job losses in mining have moderated in recent months as economic indicators for the industry have shown mixed results,” the BLS report noted.
Moreover, crude oil had been having its one of its worst weeks since January, falling about 9% from Monday to Thursday, to around $43.43 a barrel. Although as of Friday at 10:36 a.m. ET, prices have rebounded slightly, to about $44.14 a barrel.
The latest data for the Baker Hughes rig count data, a proxy for the health of the US oil sector, will be out at 1 p.m. ET. And this will give another taste of how the American energy sector is doing.
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