The effects of oil news shock on sectoral employment in the USA

KANDEMİR KOCAASLAN Ö., Uckun Ozkan A.

Empirical Economics, vol.70, no.3, 2026 (SSCI, Scopus) identifier

  • Publication Type: Article / Article
  • Volume: 70 Issue: 3
  • Publication Date: 2026
  • Doi Number: 10.1007/s00181-025-02859-1
  • Journal Name: Empirical Economics
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus, IBZ Online, ABI/INFORM, EconLit, Geobase, Public Affairs Index
  • Keywords: Oil news shocks, Oil prices, Proxy VAR, U.S. employment, VARX
  • Hacettepe University Affiliated: Yes

Abstract

This paper looks into the influence of oil news shocks on both aggregate and sectoral employment in the U.S. economy. We observe the employment response to oil market expectations differs considerably across aggregated and disaggregated levels employing both proxy VAR and VARX models. We discover that an oil news shock causes employment to decline across nearly all sectors, supporting the supply-side channel. However, in the energy sector, specifically in the mining and logging and oil and gas extraction industries, it has been discovered that unfavorable news that drives up oil prices results in a notable rise in employment. This is most likely due to increased production and investment activities in these industries. The findings are found to remain robust when using alternative oil price measures.