With unemployment at a 26-year high of 9.8 percent, employers trumped expectations, cutting a whopping 263,000 jobs in September. Labor Department figures show a loss of 7.2 million jobs since December 2007, bringing the total number of unemployed Americans to an astounding 15.1 million.
Oil prices fell October 2 in response to a flagging job market, confirming suspicions about overall U.S. economic health and future demand for crude oil. NYMEX saw crude dip to a morning-low of $68.32, with November delivery down $1.14 a barrel. The London, ICE Futures exchange, saw Brent crude prices also down $1.41 to $67.78.
Elsewhere on the NYMEX, heating oil fell 3.77 cents to $1.7897, with November delivery of gasoline down 2.87 cents to $1.7292. After an 8% decline in natural gas Thursday, in response to the news that U.S. stockpiles reached a record high, natural gas showed gains of 17.43 cents at $4.640 per 1,000 cubic feet.
A 6-month rally in crude has seen the price double since February, mostly due to anticipation of an economic rebound from the worst recession since WWII. Job and manufacturing statistics show a weaker-than-expected economy, and with government stimulus programs like Cash for Clunkers and the $8,000 new home buyer credit expiring, investors are on the edge of their seats.
Phil Flynn, an analyst for PFGBest, projected a $60 floor for oil prices this year, suggesting that prevailing conditions would be an acid-test for economic solidity.