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The US shale boom is having a positive effect on the nation’s economy, as the Washington Post reports that for the month of October the trade deficit has narrowed once again. The main reason is that the growing quantities of oil and gas being produced have helped the country to reduce its import of petroleum products, and increase the volumes that it exports.
From the beginning of the year to the end of October, the US trade deficit for petroleum products fell by $48 billion (19%), whereas for non-petroleum products the trade deficit actually grew by $20 billion (5.6%). In total crude oil exports have fallen by $36.3 billion, whilst crude exports have risen $1.6 billion, and natural gas exports are up $1.3 billion.
The Washington Post calculates that if the rate of change in the trade balance from October continues for the whole year, then the US trade deficit should fall by $235 billion, adding an extra 1.5 percentage points to the 2013 GDP growth rate.
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Unfortunately, whilst the energy boom has helped the economy, it has not had quite the same effect on the employment sector as might be expected. In October the oil and gas industry employed just 200,000 people, with an extra 304,000 employed in supporting industries, and combined the two sectors have only added 31,000 jobs throughout the whole year, a tiny fraction of the 2.3 million new jobs created across the whole country in the same period.
Simply put, whilst the energy boom boosted GDP growth by 1.5 percent, it only contributed to two hundredths of a percentage increase in the number of jobs created.
However, the American Petroleum Institute calculates that the energy industry was responsible for 9.8 million jobs in 2011 when taking into account all the small ways in which the increased income created by natural gas and oil has trickled into the economy and created new jobs for people in sectors as far reaching as lawyers, waitresses, car traders, etc.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com