Gravel in job machine threatens rate hike in the US – Swedish newspaper Svenska Dagbladet

Midland, Texas.

Around the Midland in West Texas is unused oil drilling in the stacks of the oil service companies. An increasing number of drilling rigs are gathering dust in anticipation of a higher world. Each rig providing employment for dozens of people.

This spring has been the impact of last year’s collapse in oil prices beginning to show up in one of the US fracking boom main centers: quantities of oil workers losing jobs. 11,000 jobs disappeared in March in the mining industry, where oil and gas are included. After having added 41,000 jobs in 2014, mostly thanks to America’s boom in oil fracking, has 30,000 of them already disappeared during the first three months, according to the US Labor Department.

Still, think of expertise in Midland this is just the beginning.

– It is generally a delay of around six months in the labor market for oil service company that drilling and fracking, says Ross Lacy, 32, Republican councilors and oil Officer in Midland, SvD Business.

The slowdown in the oil industry represents a small part of the disappointment surrounding the US economic strength that came in Friday’s labor market figures. The number of new jobs in March was 126,000 – significantly below the expected 245 000. The official unemployment rate remained unchanged at 5.5 percent.

The decline should be seen against the well over 200,000 jobs per month that has been in the US for over a year now.

In addition, downward revisions were the figures for February to 264,000 from 295,000 and for January to 201,000 from 239 000th

Bad weather and generally weak consumption constitutes the biggest reason for the March weak labor market developments, the worst since 2012, analysts said on Friday. In addition, a strong dollar that now puts imprint on large corporate profit numbers.

For the central bank Federal Reserve means the unexpectedly weak jobs report for March a new headache. According to the Fed’s district office in Atlanta, Georgia, is expected US growth in the first quarter of land on zero and despite the great achievements of the labor market over the past year to get the Fed Chairman Janet Yellen one reason less for the first time in nine years raise interest rates already at the interest rate meeting in June. After Friday’s statistics appear in September, again, as a much more probable date.

In large part, it is about the lack of inflation. Low oil prices are helping to keep inflationary pressures. At the Fed’s latest meeting in March predicted the central bank an inflation rate for the full year of between 0.6 and 0.8 percent, far below the target of 2 percent.

Labour contains also still shortcomings. While wages rose 7 cents an hour fell in hours worked per week in March to 34.5, showed the figures for March.

The much broader unemployment measure, called the U-6 remained in February remained at high 11, 3 percent.

All in all, – fewer jobs than expected in March, a slowing energy sector, low inflation, continued cheap oil and weak wage growth – so must the Fed Chairman Janet Yellen now go a difficult balancing act at future interest rate meetings. Everyone, including the Fed itself, believes that the US is not really a nation whose economy needs to be fired on by a zero interest rate. Yet risk higher interest rates to slow the economic recovery that suddenly seems considerably more fragile than we thought just now.