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The Texas Job Recession Is Now Literally "Off The Chart"
The paradoxical, utterly nonsensical "data" releases continue.
On one hand, the government's Department of Labor reported earlier today that in the past week just 265K people were laid off: the lowest number since early 2000. On the other, private data aggregator Challenger reported that in April, there were a whopping 61,582 job cuts, a 68% surge from March, and up 53% from a year ago. This was the highest monthly total since May 2012 and the highest April total since 2009!
Smoothing out the noise reveals that in the first 4 months of 2015, employers announced 201,796 planned job cuts, which marks a 25 percent increase from the 161,639 layoffs tracked in the first four months of 2014. This is the largest four-month total since 2010.
To say that something does not add up here between the public and private data releases is quite evident.
But while there may be massive confusion when it comes to the data propaganda and the clear agenda behind the seasonally-adjusted, policy-specific government data, there is no confusion when it comes to one thing: the job recession in Texas has not been this bad since the last of the second Great Depression.
Recall what we said last month when we "welcomed" Texas to the recession with some 47,043 layoffs through March:
... when broken down by state, things get bad for Texas, very bad. As in recession bad, because with 47K total layoffs, or 10K more than all energy-related layoffs, in just this one state so far in 2015, it means that the energy sector weakness has moved beyond just the oil patch and has spread to the broader economy and related industries in the one state that until recently had the best jobs track record since Lehman.
Fast forward to today when we find that what we thought was bad for Texas with 47K layoff announcements in the highest-paid energy sector, just got far, far worse when in its monthly update earlier today, Challenger announced that just in the month of April another 22,760 jobs were lost in Texas, bringing the total to a whopping 69,803 layoff announcements, and forcing us to literally get a bigger chart so we can accommodate the Texas data.
Challenger's description of recent events is just as dire:
Driving the increased pace of job cutting in April and for the year is the dramatic decline in oil prices, which is forcing producers and suppliers to cut production. Of the 61,582 job cut announced last month, 20,675 or 34 percent were directly attributed to oil prices.
For the year, oil prices were blamed for 68,285 job cuts, or about 34 percent of the 201,796 planned layoffs announced between January 1 and April 30.
“Schlumberger, Baker Hughes and Halliburton have all announced multiple rounds of job cuts in recent months, including April. The largest job cut of the month came from Schlumberger, which announced that it will shed 11,000 workers, in addition to the 9,000 laid off in January,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
“The jobs that are most vulnerable are those in the field – engineers, oil rig operators, drill operators, refinery operators, etc. Managers and executives in the corporate offices are more secure, but the drop in oil prices is leading to increased merger activity, which could put more executives at risk of job loss,” said Challenger.
Most of the oil-related layoffs have occurred in the energy sector, which is the top job-cutting industry to date, with 57,556 planned cuts. That is more than double the second-ranked retail sector, which has announced 26,096 job cuts this year.
The pace of retail sector job cuts is slightly higher than a year ago, when these employers announced 25,224 job cuts through the first four months.
Remember when we mocked all those idiots who claims that the collapse in oil was "unambiguously good"
“Low oil prices should be helping retailers. However, the extra money in Americans’ wallets do not appear to be making it into the nation’s cash registers. Retail sales have been lackluster, at best. Furthermore, consumer products giant Procter & Gamble announced in April that it would reduce its headcount by as many as 6,000 workers over the next two years, following a poor earnings report,” noted Challenger.
Truly confusing... if you are a Keynesian economist. As for the punchline:
“We could be witnessing the after-effect of the severe and protracted recession. Much like the generation that lived through the Great Depression, those who scraped by during the recession are being extra careful with their money. Another factor is that not everyone’s boat is rising with the tide. Many Americans are still struggling to find work and those that do are not earning as much they once did,” he said.
Actually Mr. Challenger, you are wrong: what we are witnessing is not the after-effect of the "severe and protracted recession" - we are witnessing the continuation of the Second Great Depression which never went away, and whose effect has been masked - so far - thanks to $22 trillion in central bank assets, which alone have delayed, not avoided, a historic market meltdown, and as Deutsche Bank's Jim Reid said earlier today, "capitalism has been propped up every time it’s about to go through one of the cyclical creative destruction phases."
For tens of thousands of formerly very well paid workers in Texas, the props have finally come off. They can now hone their BTFD and BTFATH "trading" skill though: the only skill they need in the new centrally-planned paranormal.
Next up: the mean reversion.
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As an ex offshore oil worker I can reasonably say scatha knows what he/she is talking about. I watched engineers kill wells that were producing for years by increasing their output causing them to sand up. Then out comes the wireline crew and maybe even a workover rig but to no avail. This was back in the 1990's...
Reminds me of the internet and Worldcomm plus the fiber optic build out. WC thought their UU Net fiber backbone could command a premium. The junk bond Wall Street scum including goldman stsrated selling junk bonds for new fiber. Soon you had like 10 fiber optic networks.
Goldman scammed the shareholders of Montana Power. Give us your powerplants and we will give you a fiber optic company. The utility investors who liked stable dividends got raped and robbed.
The junk bonds for many fiber companies tanked.
I agree.
You don't get a sudden collapse in the economy that time wise correlates perfectly with the decline in oil. The process needs to play out.
Step 1 The slowdown: Oil drops, the knee jerk reaction to lay off people and those people get paid out sometimes. People laid off have money to hold them over for a while.
Step 2 The stall (You are here): All the construction jobs (cranes everywhere) will mostly continue until the project is completed. The developer doesn't see oil prices drop and walk away, especially when he can obtain financing easy given the fed cheap money. He will have the best chance of survival to finish the project out and hope things have rebounded back to where they were once he is done. Most of those cranes and projects started well before oil really tanked.
Step 3 The big decline: Old projects are completed, buildings cannot sell/rent and most importantly no new projects are started. This leads to all the construction workers without jobs and you get the continual decrease in employment from the oil field. On top of all that, you have those who initially lost their jobs now are without much money. Now everyone suffers, like retail and services. You can also add in the fact that if money becomes less easy, the fed tightens and junk is no longer easy, then companies will find it really hard to avoid the inevitable bust.
Double Post,,, Another "Connection Reset Thingy"
The entire world economy is one huge fraud.
Boy, when this one pops, it'll make all the rest, combined, look like a Sunday walk in the park.
One of the primary characteristics of deflation is increased unemployment. The chickens are coming home to roost as the deflationary vortex sucks ever harder on a weaken economy...
http://www.globaldeflationnews.com/inflation-vs-deflation-part-1which-on...
Look at NYS with 16K at #2. LOL. Good F those Democrats in the Utopia of NYC.
Cuomo is such a turd. At least we can understand the drop in Texas as they are an oil producer and the price has dropped like a stone. NYS has no excuse, they are the largest recipient of newly printed Fiat that goes right into the big backs parked right in NYC!
Texas is scheduled for economic annihilation, NOLA invasion, Mexican invasion, and now carbon taxes (on top of oil collapse) they asked for this, voted for this and now are gonna get this.
Bush crony Socialists deserve to eat shit, in spades.
bon appetite Ted Cruz country
BTW Texas has more COP debt than CA!
How does the above Texas data point mesh with the recent endorsement of the House Panel to legalize the adult consumpiton of recreational marijuana.
For those that know that history repeats.
The crash in employment in the "red-states" is just in time to get the neo-con and evangelical Christian sheeple whipped up and ready for the neo-cons and Zion's Machtergreifung.
Liberty is a demand. Tyranny is submission.
They should have to suffer unemployment and be shuffled back into college like the rest of us. Who do they think they are?
I'll say this again...Those like ourselves who await this massive, horribly delayed "correction", will at first feel somewhat satisfied when it begins, but I am convinced every single one of us will still be surprised by how violent this will be. So for those of us who believe we will be surprised, I bet we will be surprised even after we have been surprised. This event will be worse than anyone could imagine, and its impacts will be nothing short of absolute economic & physical destruction. We will see one minute bars 50 s&p points wide, riots like we have never seen, suicide headlines, etc...
When this happens, it really won't matter to those who were ignoring the initial signs which we see today, nor will it matter to me or anyone else.
The US government destroys the oil industry in the US which Texas is a big part of just to try to destroy Russia.
Here's The truth about the conflict with Russia >> http://wp.me/p4OZ4v-1Gm