What does unemployment rate in the US have to do with the price of oil?

Question

Last month, the price of oil rose by $11 on a single day when the unemployment rate in the US rose. Why the h**l did the price of oil rise? I cannot understand. What is the connection between the price of oil and the unemployment rate in the US?

Answer 1

Oil prices skyrocked up nearly 45-percent from the same time last year. With employers worried about a sharp slowdown and their own prospects, they clamped down on hiring thus unemployment jumped to 5.5 percent, the largest one-month increase in unemployment in 22 years.

Answer 2

as oil increases people can't afford to go to work, or it becomes cheaper to stay at home paying for child care, for example, if making only 150-200 a week and having to spend 100 child care 50 in gas why work?

Answer 3

Higher oil prices resulted in higher gas prices which drove up the prices of other goods and products (increased cost of gas meant increased costs of production and distribution).  More money from a family's monthly budget goes to pay for gas, so there is less money available to pay for groceries, which have increased in price.  That means more goods are NOT selling, thus slowing production.  As production slows,  factories reduce their workforces and staffs, driving up unemployment.  Add the downturn in the housing industry and the financial sector losses which have caused cutbacks in staffing, as well as the drop in production by the automobile industry.  I expect unemployment to continue to rise over the short term, possibly through the end of this year as all of this works through the economy.   As for the numbers you noted, I would think the fact they were released the same day was coincidence.

Answer 4

If the oil prices rise, this has long term effects we see on the economy. If the trend continues, we can expect less people to be able to afford other goods!! They will be spending a fixed range of money on gas, and their own income is in a fixed range too (unless they work overtime or make a big profit!), and so if you increase the price of oil -> increase in price in gas -> less money for people to waste on other things if income and wealth is the same. This means that employers and businesses have less money to give to employees in wages! When theres such a crunch, employers and firms want to get rid of people so that they can stay fat and eat at home and not lose weight! So they fire everybody who is expendable and was just mopping floors and doing nothing useful. So all the expendable people get fired and the unemployment rate measures the people without a job, right? So this rate goes up when this happens! This is what happens when you increase the price of oil over the long term! Not good!!!

Answer 5

I have never know anyone who actually filed for unemployment who has been able to receive it.  It is all a joke.  The former employer with all their money and hordes of lawyers says it was

loosely put "misconduct" and the unemployment office ( though they are suppose to be impartial adjudicators) says ok and thats that you don't get the unemployment of course you can file another request but then what will happen?  The same thing with out money and lawyers on your side you have nothing just like you will soon not be able to buy any oil., But guess what? those people with jobs at the so called "unemployment office" will still have their jobs which they should not have as no one even gets unemployment benefits from them (except maybe they would if they lost their jobs) and they will also still have their suvs and their gas and oil and what will we have nothing. No rights with no money though the system is set up to delude us into thinking we have some rights of appeal we don't.

Answer 6

well don't feel like the lone ranger, my only summation is people cannot afford the  gas to get to work or to look for work, too bad the big three auto makers and good year rubber bought up all the public transportation and rail services and bankrupted them deliberately so people would be forced to buy cars and trucks. that is a true fact. the oil companies also contributed to their demise so they could sell more oil and gas, as well as buy up patents on gas saving carboration for engines. One of those is the use of manure to create methane gas to run a vehicle. But hey, they would not be able to tax us to death if they let the cat out of the bag.

Answer 7

When the oil prices go up the cost of making related commodities also go up and if the company cannot raise their price because they will loose the competition, they will need to give up some expenses. That's one of the reason.

The Oil prices don't go up because of unemployment rate. The ricing of oil prices today are base on high demand and fear for the world reserved is on its peak. When the USSR collapse at least  120 countries joined the world market but resources like oil,steal, copper,cement didn't increase. And China learned how to use his ability to compete. Some countries like Russia don't want to share their resources. So what you gonna do?

Answer 8

The rise in oil price does not immediately or instantaneously impact employment to increase the unemployment rate. Such effects take [place over a period of time. If the unemployment rises this month it may have been due to many factor including oil price rise that had taken place in the previous 6 months, rather than last month.

The way oil price rise affect unemployment rate is as follows:

A rise in oil price affects the cost of production of crude oil-input based products like gas, diesel, petrochemicals, fertilisers and pesticides. The producers of these [products will try to pass on the cost to their customers. If the price elasticity of demand for these products is high, this would lead to a fall in demand for these products resultuing in lower output and hence lower employment in these product manufacturing. If the demand for some of these products is highly inelastic, demand may not fall but the customers having forced to spend more of their income, budget on these products will have lower amount of money to spend on other goods whose demand may be price elastic, resultuing in a fall in the demand and hence output and employment for manufacturing these products. When employment falls, unemployment rate rises, if the potential work force reamains constant or rises.

Answer 9

the oil price has got to do with other factors; it could be higher demand for oil from emerging economies or lower supply of oil from oil producing countries where there r political and social unstability; as far as i know the high unemployment rate in the US  is due to recession caused by housing slump and financial crisis

Answer 10

coincidence?

Answer 11

I am playing very big on oil trading, from Morgan Stanly,  Goldman & Sachs on the Wall Street .

I bought millions and millions of barrels of oil when they cost $60--$100 a barrel. I expect to make a kill when I sell. But right now it’s only $145 a barrel. So here is my difficulty:

I already requested my agents spin the media, like: “Oil future looks high, expecting to be in the range of $200 a barrel soon. ”   But it does not work price up as fast as I expected.

I have also demanded my agent playing “China demand high” blaming game.

I am glad to see that Congress is ignoring 19 top trade group’s letter demanding an end to rampant oil speculationhttp://energy.senate.gov/public/index.cf...

Also I  am happy to see that the Media did not report it as I  desired.

But how do I corner the oil future price up very fast ?  fast enough in time so not to get caught ?