Plunging oil won’t put a dent in U.S. employment Market Watch

This article originally appeared in Market Watch

NEW YORK (MarketWatch) — Yes, oil’s been cratering, but that’s not going to hurt U.S. employment.

Deutsche Bank’s chief international economist, Torsten Sløk, says less than 1% of the total employment in the U.S. economy comes from the energy sector and notes that any layoffs in the oil sector resulting from the swift downturn in crude-oil prices will be insignificant.

In a research note released Monday, Sløk argues that falling oil prices are “unambiguously good news for the macro economy.”

The Deutsche Bank economist says assessing how many jobs have been created outside of the energy-strong states since the “great recession” compared with the rest of the country “shows that during this recovery the vast majority of jobs have been created outside the energy sector.”

Sløk’s chart below illustrates that point:

Sløk’s upbeat viewpoint on oil comes as the stunning, months-long downdraft in oil is giving the market, which has been unsure at times on how to read the rapid slump in oil, a case of split personality: up triple digits one day, massively down another.

On Tuesday, oil marched lower with West Texas Intermediate oil trading on the New York Mercantile exchange for February delivery CLG5, -0.74% down 78 cents, or 1.7%, to 45.28, while February delivery Brent North Sea oil LCOG5, -0.73% the international benchmark, was off $1.30, or 2.7%, to $47.40. Oil’s slump on Tuesday was driven, in part, by comments from United Arab Emirates’ oil minister,Suhail Mohamed Faraj al-Mazrouei, who said OPEC is standing pat on its decision not cut oil production.

It’s worth noting that although a number of companies have scaled back 2015 energy budgets — most recently Houston-based Swift Energy Co. SFY, -20.82%which cut its 2015 budget by more than 70%.— employment in energy doesn’t seem to be affected by oil’s slump as yet.

Indeed, jobs in the oil-and-gas sector rose by 400 in December, according to Friday’s jobs report. The country’s overall unemployment slid to 5.6% in December from 5.8%.

So, despite the slide in oil, energy companies, while they are probably feeling the strain, don’t seem quite ready to blink in a big way on jobs

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