by Calculated Risk on 1/08/2015 07:49:00 PM

First an important point from Tim Duy: Volatile Week Ahead of Employment Report

I tend agree that the net impact [from the decline in oil prices] will be positive, but note that the negative impacts will be fairly concentrated and easy for the media to sensationalize, while the positive impacts will be fairly dispersed. We all know what is going to happen to rig counts, high-yield energy debt, and the economies of North Dakota and at least parts of Texas. "Kablooey," I think, is the technical term. Easy media fodder. Much more difficult to see the positive impact spread across the real incomes of millions of households, with particularly solid gains at the lower ends of the income distribution. This will be most likely revealed in the aggregate data and be much less newsworthy.
emphasis added

We are already seeing stories about layoffs in oil related industries (and suppliers). However, since the US is a large net importer of oil, the overall impact of lower oil prices should be positive for the US economy. The negative stories are newsworthy, but it is worth remembering - as Tim Duy notes - that the positive stories will be hidden in the aggregate data.

Here was an employment preview I posted earlier: Preview: Employment Report for December

Friday:
• At 8:30 AM ET, the Employment Report for December. The consensus is for an increase of 240,000 non-farm payroll jobs added in December, down from the 321,000 non-farm payroll jobs added in November. The consensus is for the unemployment rate to decline to 5.7% in December from 5.8% the previous month.

• At 10:00 AM, Monthly Wholesale Trade: Sales and Inventories for November. The consensus is for a 0.3% increase in inventories.