U.S. miners have experienced the equivalent of a second Great Recession this year, thanks to the precipitous drop in oil prices.
Jobs numbers published by the Bureau of Labor Statistics on Friday show that the country has lost 109,000 mining jobs since December. That loss is nearly as great as the 114,000 mining jobs lost during the recession, and it’s taken place during a shorter timespan.
The major loss in mining jobs comes at the same time that the U.S. has added 2.06 million payroll jobs overall.
What appears to be happening is that slowing growth in China and other emerging market economies has hurt demand for oil and other commodities, driving prices down.
A barrel of Brent crude oil has fallen in price from more than $110 in summer 2014 to about $50 today. The fallout has been catastrophic for oil-field jobs, even as other U.S. businesses have been adding positions.
The number of oil rigs in the U.S. has plummeted.
Some of the job losses are related to a longer-running decline in coal mining, which has been chalked up to some extent by new regulations as well as the record-low price of natural gas, which competes with coal in running power plants.
But by far the biggest losses have been in jobs related to oil production, with oil and oil-field services companies such as Chevron, Halliburton and Schlumberger cutting jobs. The oil-field support services that tend to rigs in the field are usually the first to suffer losses when oil prices fall, and they have been devastated:
The bad news is that support activities is the Bureau of Labor Statistics’ category that includes many good-paying jobs, such as derrick operators and drill operators.
The good news is that, for now, many economists do not believe that oil-related job losses pose the threat of a recession.
The Federal Reserve has consistently placed falling prices among the factors that are likely to have only a “transitory” effect on the economy.
“What we see is a domestic economy that is pretty strong and growing at a solid pace, offset by some weakening spilling over to us from the global economy,” Federal Reserve Chairwoman Janet Yellen said Wednesday in congressional testimony.
