Drilling cutbacks drag down job growth in oil patch

Hammered by cheaper oil, drilling firms have laid off workers and dragged job growth lower in states from Texas to North Dakota.

In Oklahoma, mining and logging jobs, which mostly include oil and gas drilling, fell for the fifth straight month in April. Texas lost 8,300 jobs in the sector, the most in six years, while Wyoming lost jobs in the industry for the fifth straight month.

The figures, from a Labor Department report on state unemployment rates released Wednesday, show how the slowdown in the nation's energy sector is weighing on the economy. Oil prices plunged from about $110 a barrel last June to below $50 a barrel in January. They have since recovered a bit, to just below $58 Wednesday.

A report on economic growth in the first quarter to be issued Friday is widely expected to show that the economy actually shrank from January through March. Steep reductions in spending by drilling companies on the rigs, steel pipe and other equipment needed for new wells are a big reason for the slowdown.

Overall, Texas gained 1,200 jobs in April, a small expansion compared to its average monthly increase of 34,000 last year. The state also lost jobs in construction and manufacturing. In March, Texas shed a total of 25,200 jobs, the most in nearly six years.

Oklahoma added 4,200 jobs in April, after shedding 12,300 in March, also the most in six years.

North Dakota, which had benefited from an oil and gas drilling boom, has lost jobs in mining and logging for three straight months. Its unemployment rate, which had been the lowest nearly every month since the recession, rose to 3.1 percent, from 2.7 percent a year ago. Its rate is now the second-lowest, after Nebraska's.

Large oil and gas drilling companies have announced thousands of job cuts this year. Halliburton has said it has laid off 9,000 workers, more than 10 percent of its workforce, in the six months ending in March. Schlumberger has announced 20,000 job cuts since the beginning of the year, and Baker Hughes has said it would eliminate 7,000 jobs, or about 11 percent of its work force.

On a brighter note, Wednesday's report also showed that unemployment rates fell in 23 U.S. states in April as hiring rebounded nationwide.

The Labor Department said 11 states reported higher unemployment rates than in March, while 16 states saw no change. Forty states gained jobs, and 9 states posted job losses.

Nationwide, employers added a healthy 223,000 jobs in April, lowering the unemployment rate to a seven-year low of 5.4 percent. That represented a reassuring bounce back after the economy generated just 85,000 jobs in March.

Nevada had the highest unemployment rate last month at 7.1 percent, followed by West Virginia at 7 percent.

- CHRISTOPHER S. RUGABER, AP Economics Writer