WASHINGTON — In June, when oil cost $107 a barrel, U.S. employers added a healthy number of jobs — 267,000. Now, with oil below $50, hopes are rising that hiring in the United States is poised to intensify.
Goldman Sachs forecasts that if oil stays near its current price, the economy will add 300,000 more jobs this year than if the price had remained at its June level. Stronger job growth is foreseen at retailers, auto dealers, shipping firms, restaurants and hotels — all of which will likely show gains in Friday’s jobs report for December.
From gas-station prices to utility bills, consumers and businesses are now enjoying savings on basic energy costs. It means more people can splurge on purchases from clothing and appliances to vacations and dinners out. That stronger demand will likely require some businesses to step up hiring, which would circulate more money through the economy and perhaps fuel further job growth.
Just as critically, cheaper gas is suppressing overall U.S. inflation. Lower prices keep down yields on U.S. Treasurys. Lower yields, in turn, serve the housing market by reducing mortgage rates and potentially producing more construction jobs. This week, for example, the average rate on a 30-year fixed mortgage sank to 3.73 percent, its lowest point since May 2013.
“These lower oil costs are a tax cut for everybody — except the energy producers,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank. “It gives us an acceleration in employment.”