No jobs and too much oil

Do you remember the last time global oil consumption dropped and weekly jobless claims spiked over half a million? How about the halcyon days of Ronald Reagan's first term?

Published December 11, 2008 2:58PM (EST)

Some synchronicity to chew on:

  • The Labor Department reported that the number of new claims for jobless benefits in the United States hit a seasonally adjusted 573,000 in the week ended Dec. 6 -- a 26-year high.
  • The International Energy Agency reported that global oil demand is expected to contract this year for the first time in 25 years. OPEC is desperately negotiating over production cuts -- now there's too much oil being pumped.

Roll the clock back a quarter-century and you're looking at the tough recession of Ronald Reagan's first term, which until this year held pride of place as the U.S.'s worst recession since the Great Depression. The conclusion could not be more obvious: When the economy tanks, workers lose their jobs, and oil consumption bottom-lines. The causality is a little more complicated -- in the early 1980s, the U.S. economy was still reeling from the oil shocks of the late 1970s, while this time around, rising oil prices were only one part of the load that broke the economy's back.

Nonetheless, the lowest gas prices in the United States since March 2004 are finally changing driver behavior. According to MasterCard, U.S. "gasoline demand rose last week for the first time since April," reports Bloomberg.

We might be losing our jobs, but we're no longer terrified of the gas pump.

I wish it was the other way around.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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Related Topics ------------------------------------------

Globalization Great Recession How The World Works Ronald Reagan U.s. Economy