The oil industry employs some 10 million people in the United States. That’s part of why the trouble in the oil market this week is so worrying.
“I’m worried on several levels,” Diane Swonk, chief economist at Grant Thornton, told Alison Kosik on the CNN Business digital live show Markets Now. “One is, we can’t benefit from the lower oil prices because we’re sheltering in place and we’re not driving anywhere.”
And there’s a large spillover effect, she added, “The multiplier can be up to seven for every job lost. You can see many more jobs lost in the oil sector.”
The oil market collapsed earlier this week, amid weak demand and concerns about storage capacity. Many jobs will be lost in the sector as the fundamental worries and the coronavirus crisis persists. “The multiplier can be up to seven for every job lost,” Swonk said. “You can see many more jobs lost in the oil sector.”
The oil industry was also the second largest category applying for government loans, she added, which speaks to just how troubled the industry is.
Over the medium term, “we’re going to see lower [oil] production in the US and job losses,” she added.