Make us your home page
Instagram

Oil prices fall amid mixed economic signals

Crude oil futures plunged nearly 9 percent to settle below $100 per barrel as investors who had ridden a monthslong rally fled the market Thursday because of concerns about weakening demand for fuel in the United States.

The decline of $9.44 per barrel, or 8.6 percent, brings the week's loss for oil to $14.13, or 12.4 percent. Other commodities like silver and cotton have plunged, as well.

Oil rose 35 percent from mid February through the end of April. As it climbed above $100, economists warned that high fuel prices were taking a toll on the U.S. economy. Gasoline demand starting falling in March as motorists paid more at the pump; that trend was reinforced by industry and government studies released this week.

"More and more people were saying that oil was just too high," said Michael Lynch, president of Strategic Energy & Economic Research. "That got a lot of investors ready to run for the door. That's what they're doing now."

Also Thursday, the Labor Department said that applications for unemployment benefits rose by 43,000 to a seasonally adjusted 474,000 last week, the highest level in eight months and a troubling sign ahead of the government's report on April employment, which will be released today.

It was the third increase in jobless claims in four weeks. Applications have jumped 89,000, or 23 percent, in the past month. The four-week average, a less volatile measure, rose for the fourth straight week to 431,250.

"The trend is clearly upward, so that's disconcerting," said Kurt Karl, chief U.S. economist for Swiss Re. "When you get three or four weeks in a row of special factors, they're no longer so special."

Meanwhile, productivity rose at an annual rate of 1.6 percent in the January-March period, compared with a 2.9 percent increase in the previous quarter, the Labor Department reported Thursday. The gain in productivity was much slower than in the previous three months.

Labor costs rose at a 1 percent annual rate in the January-March period after falling 1 percent in the previous three months.

A slowdown in productivity growth is bad for the economy if it persists for a long period. But it can be good in the short term when unemployment is high because it signals companies must hire more workers in order to make further gains.

Analysts expect productivity will slow to about 2 percent growth for the year. They say companies are reaching the limits on how much they can get from their existing work forces and will have to begin hiring more workers in order to boost output further. They also forecast that labor costs will begin rising modestly after two years of declines.

Companies found ways to produce more goods and services with fewer workers during the recession. Greater productivity helped them boost profits. But it also allowed them to hold back on hiring after companies slashed millions of jobs during the downturn.

Oil prices fall amid mixed economic signals 05/05/11 [Last modified: Thursday, May 5, 2011 7:43pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. New owners take over downtown St. Petersburg's Hofbräuhaus

    Retail

    ST. PETERSBURG — The downtown German beer-hall Hofbräuhaus St. Petersburg has been bought by a partnership led by former Checkers Drive-In Restaurants president Keith Sirois.

    The Hofbrauhaus, St. Petersburg, located in the former historic Tramor Cafeteria, St. Petersburg, is under new ownership.
[SCOTT KEELER  |  TIMES]

  2. Boho Hunter will target fashions in Hyde Park

    Business

    Boho Hunter, a boutique based in Miami's Wynwood District, will expand into Tampa with its very first franchise.

    Palma Canaria bags will be among the featured items at Boho Hunter when it opens in October. Photo courtesy of Boho Hunter.
  3. Gallery now bringing useful art to Hyde Park customers

    Business

    HYDE PARK — In 1998, Mike and Sue Shapiro opened a gallery in St. Petersburg along Central Ave., with a majority of the space dedicated to Sue's clay studio.

     As Sue Shapiro continued to work on her pottery in St. Petersburg, her retail space grew and her studio shrunk. Now Shapiro's is bringing wares like these to Hyde Park Village. Photo courtesy of Shapiro's.
  4. Appointments at Raymond James Bank and Saint Leo University highlight this week's Tampa Bay business Movers & Shakers

    Business

    Banking

    Raymond James Bank has hired Grace Jackson to serve as executive vice president and chief operating officer. Jackson will oversee all of Raymond James Bank's operational business elements, risk management and strategic planning functions. Kackson joins Raymond James Bank after senior …

    Raymond James Bank has hired Grace Jackson to serve as executive vice president and chief operating officer. [Company handout]
  5. Cooking passion spurs owner to pull open AJ's Kitchen Drawer

    Business

    TAMPA — After graduating from the University of Tampa in May 2016, AJ Albrecht spent four months traveling around Southeast Asia and Australia.

    AJs Kitchen Drawer offers a wide variety of unique kitchenware items, such as handcrafted knives and wooden items, as well as local gourmet products. Photo by Danielle Hauser