Nov 17, 2017

Oil employment's lagging recovery

Ben Geman, author of Generate

A new presentation from the Dallas Fed has a chart that caught my eye. It shows how employment in one key part of the industry — extraction and supporting activities — has not bounced back alongside U.S. production, which fell sharply in 2015 after prices collapsed but has been moving up again for a year and heading for record levels.

Expand chart
Data: Federal Reserve Bank of Dallas, Bureau of Labor Statistics; Chart: Axios Visuals

Between the lines: Kunal Patel, a senior research analyst with the Dallas Fed, offered some insight in an email exchange:

"There are likely a variety of factors causing employment to not keep up with rising production. Primarily, efficiency gains (faster drill times and more production output per well) are allowing operators to produce more with less people," Patel said.

  • Some evidence: He notes that the oil rig count as November 10 was 738, which is slightly under half of the 2014 average, yet production has risen by by about a million barrels per day over the last year to the current level of roughly 9.6 million barrels per day.

"Additionally, greater use of technology is likely leading to automation of some tasks and allowing operators to be streamlined and more efficient. Big data has also allowed the industry to be more efficient," Patel said.

Go deeper: He highlighted this Bloomberg piece on industry adoption of advanced tech and data analysis, and this Dallas Morning News story on industry employment trends and technology.

Go deeper

HBCUs are missing from the discussion on venture capital's diversity

Illustration: Eniola Odetunde/Axios

Venture capital is beginning a belated conversation about its dearth of black investors and support of black founders, but hasn't yet turned its attention to the trivial participation of historically black colleges and universities (HBCUs) as limited partners in funds.

Why it matters: This increases educational and economic inequality, as the vast majority of VC profits go to limited partners.

Unemployment rate falls to 13.3% in May

Data: Bureau of Labor Statistics; Chart: Axios Visuals

The U.S. unemployment rate fell to 13.3% in May, with 2.5 million jobs gained, the government said on Friday.

Why it matters: The far better-than-expected numbers show a surprising improvement in the job market, which has been devastated by the coronavirus pandemic.

The difficulty of calculating the real unemployment rate

Data: U.S. Department of Labor; Note: Initial traditional state claims from the weeks of May 23 and 30, continuing traditional claims from May 23. Initial PUA claims from May 16, 23, and 30, continuing PUA and other programs from May 16; Chart: Andrew Witherspoon/Axios

The shocking May jobs report — with a decline in the unemployment rate to 13.3% and more than 2 million jobs added — destroyed expectations of a much worse economic picture.

Why it matters: Traditional economic reports have failed to keep up with the devastation of the coronavirus pandemic and have made it nearly impossible for researchers to determine the state of the U.S. labor market or the economy.