Things have gotten so bad in the oil industry that workers have stopped paying their car loans

It’s a hard time to be an oil worker.

The slump in the price of crude — which is still half what it used to be even after a recent recovery — is hitting jobs and showing up in the consumer lending market.

Researchers at the Federal Reserve Bank of New York recently took a look at hardship in oil producing counties. They laid out their findings in a blog post on the NY Fed’s Liberty Street Economics site, Tuesday.

They identified the counties where oil and gas jobs make up at least 6% of employment (the national average is 0.6%). There are 327 such counties, in the US, representing 1.7% of total US employment.

They then looked at delinquency rates in those areas. The findings for auto loan delinquencies is especially interesting.

From the report:

Auto loan delinquency rates were very similar in energy-producing counties to the U.S. average between 1999 and 2007. Beginning with the financial crisis, though, the energy counties began to perform persistently better. Since mid-2014, though, energy-county delinquencies have risen sharply in both absolute and relative terms.

The chart attached shows that auto delinquencies in high-energy counties is now comparable with the rate during the financial crisis, and is approaching 5%.

Now this is clearly only a very tiny sample size. Still, it is worth paying attention to on two fronts. First, as my colleague Bob Bryan noted this morning, the collapse of oil could still infect the rest of the economy.

Second, there have been a lot of concerns raised in recent years over loosening auto-lending standards, and there’s plenty of people willing to dismiss these. Tracking what happens in these 327 counties may at least give us a clue as to which side of that debate is right.

This is something to keep an eye on.

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