Barry Ritholtz, a columnist for Bloomberg, dissects claims that most of the job growth since 2007 has been in the oil and gas sector. If that were the case, the U.S. economy would be in hot water, since oil and gas prices have tanked. Given the fact that job numbers continue to grow while oil and gas companies suffer from low prices implies there is a disconnect, but Ritholtz looks more closely at the numbers.
He takes to task those who claim that there hasn’t been any real job growth outside of Texas and North Dakota, where drilling has been taking place. Bond investor, Jeff Gundlach, made that claim on a conference call, and Ritholtz says Grundlach’s claim is “demonstrably false.”
The studies come from biased think tanks and are “full of analytical errors.”Ritholtz refers to the saying, “Torture the data long enough, and it will confess to anything.” Many jobs were lost during the Great Recession, but according to the Bureau of Labor Statistics, more than 10 million jobs were created since the end of 2010. The oil and fracking industries have added around 250, 000 jobs since 2010, a far cry from 10 million.
Still, the Manhattan Institute, one of the cheerleading think tanks, still claims 10 million jobs are associated with the oil and gas industry. The American Enterprise Institute makes similar euphoric statements, and calls Texas “the great American job machine.” Ritholtz points out thatregulations in Texas tend to cap debt and prevented the kind of home-equity borrowing that led to the financial crisis. In short, Texas wasn’t hurting that much to begin with.