US jobs growth stalls as shale gas bubble ends

Economic growth


US jobs Apr15Apparently Friday’s US jobs numbers disappointed the experts.  The consensus forecast was that 250k jobs would have been created in March – yet only half the forecast actually appeared.  Even more tellingly, hiring estimates for January/February were revised down.  Separate data also showed weak growth in wages and spending.

None of this was really a surprise, however.  There was plenty of evidence that US employment had simply seen a temporary boost from the shale gas bubble.

My 8 January post was even headlined “US jobs growth at risk with end of the shale gas advantage“, and was followed a week later by a post titled “US economic recovery at risk as energy bubble bursts“.  All the necessary data was easily available in the public domain, if anyone wanted to look.

But as during the subprime era, the consensus simply didn’t want to know.  It was much easier to pretend to believe that somehow printing money could change the fundamentals of the US jobs market.  But at the risk of repeating myself, the key data continues to be found in charts 16 and 17 of the Bureau of Labor Statistics monthly report, as shown above:

  • US employment rates depend on race (chart 16) and educational level (chart 17)
  • The jobless rate for Blacks (10.1%) is double that for Whites (4.7%) and Asians (3.1%), and 50% higher for Hispanics (6.8%)
  • The rate for those without a high school diploma (8.6%) is 3x that for those with a bachelor’s degree (2.5%)
  • The rate for those with a high school diploma (5%) is still double that of those with a degree

The issue is rather, as I noted back in September, that politicians prefer to ignore these structural problems in the economy.  It is much easier to instead simply tweet about the need for more stimulus, and then deliver a sound-bite on the subject for the evening news bulletin.

The news is also embarrassing for the US Federal Reserve.  They have spent nearly 2 years preparing to celebrate the success of their stimulus policies, since the ‘taper tantrum’  – when then Fed Chairman Ben Bernanke suggested in May 2013 the Fed would soon be able to “normalise” its policies.

But now that oil prices are returning to their historical relationship to natural gas, in terms of energy value, the bubble is ending.  And unfortunately, it is taking with it the highly paid jobs that the bubble had created.




Volatility rises as central bank policies prove wishful thinking


Q1 was very difficult for many companies and investors.  They had wanted to ...

Learn more

China GDP may fall to 1.7% in Q4, warns Bank of England


It seems that China is preparing for a difficult 18 months.  President Xi and P...

Learn more
More posts
The New Normal for global industry

The global chemical industry is the third largest sector in the world behind agriculture and energy,...

Debt, deflation, demographics and Brexit set to challenge London house prices

London property websites haven’t used the word “reduced” for many years. But it...

The bill for two decades of doomed stimulus measures is due

The Financial Times kindly made my letter on the risks now associated with central bank stimulus the...

Local supply chains replace global trade as world starts to “do more with less”

Something quite dramatic is happening in the global economy.  Of course, Wall Street analysts still...

Financial markets enter their Convulsion phase

Many companies and investors are still comparing today’s downturn to the 9-month hiccups seen afte...

World risks moving from Denial into Anger as the Paradigm of Loss moves forward

The head of the IMF has warned again on the likely scale of the economic depression ahead: “Gl...

The world has wasted 3 months – there is little time now left to avoid a Covid-19 catastrophe

It is now 3 months since China’s state television broadcast the first news of the Wuhan virus,...

A new recession era to emerge

Contingency planning has become mission-critical. The longer the coronavirus pandemic continues, the...


Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more


Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more