U.S. oilfield services and equipment sector employment took a step back in November after eight consecutive months of gains, according to a new Energy Workforce & Technology Council analysis of federal data.
Using Bureau of Labor Statistics (BLS) data, the Council, along with researchers from the University of Houston, found that the sector shed 818 jobs last month. However, that marked a mere 0.1% loss, and it followed a 1.9% gain for the period of August-October. Sector employment has grown at an average monthly rate of 0.92% in 2021.
The Council’s monthly Energy Technology & Services Employment Report showed a peak of more than 109,000 pandemic-related job losses. The study found that job cuts were steepest in April 2020, when the sector lost 57,294 jobs. It marked the largest one-month decline since 2013 and developed shortly after coronavirus outbreaks grew widespread in the Lower 48.
Since then, however, the oilfield services and equipment industry has gradually recovered and restored more than 50,000 jobs, lowering pandemic employment losses to 59,043 jobs at the close of November, the Council estimated.
Oil prices cratered in 2020 after government restrictions on travel and commerce temporarily choked off crude demand. But with successful vaccine rollouts and a rebound in consumption of gasoline and jet fuel this year, West Texas Intermediate crude prices were up more than 35% from the start of 2021 through the end of November.
“I don’t think there’s any question activity and employment have climbed back this year alongside higher prices,” Samco Capital Markets’ Jacob Thompson, managing director, told NGI. “Of course, prices ebb and flow, and hiring is going to be uneven month to month, but overall the trends have been positive this year.”
The broader U.S. economy, meanwhile, added a seasonally adjusted 210,000 jobs in November, the BLS reported Friday in its monthly employment report.
It was the smallest monthly gain since December 2020 and paled in comparison to the 546,000 jobs added in October.
However, economists noted, the latest total was skewed by the fact that nearly 600,000 people joined the workforce in November. The labor-force participation rate reached 61.8%, the highest level since March of last year, when the novel virus was declared a pandemic.
The U.S. unemployment rate in November fell to 4.2% from 4.6% the previous month and reached a pandemic-era low. The decline was “consistent with tighter labor market conditions,” said Raymond James Financial Inc. Chief Economist Scott Brown.
Through November, employers have added an average of 555,000 jobs per month this year.
In Congressional testimony last week, Federal Reserve Chairman Jerome Powell said rising wages are drawing more Americans back to work following pandemic-imposed pauses. Average hourly wages rose 4.8% in November from a year earlier, notably above pre-pandemic annual growth rates around 3%.
“With the rapid improvement in the labor market, slack is diminishing and wages are rising at a brisk pace,” Powell said.
The new Omicron variant of the coronavirus, however, may pose an emerging threat to the recovery, Powell noted, depending on how quickly it spreads in the United States, its potential resistance to vaccines and the severity of illness it causes.
“Greater concerns about the virus could reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions,” Powell said.
