Tens of thousands of workers in the energy sector have lost their jobs in the last few months as oil and gas prices tanked.
But for most consumers, cheap oil will be a tax break of up to $US814 this year by one estimate.
During Darden Restaurants’ earnings conference call in December, one analyst was curious about how the restaurant giant was faring in oil-producing regions, and whether it was seeing any pullbacks in foot traffic.
Darden is the parent company of restaurants including Olive Garden and the subject of a 294-slide presentation filed by hedge fund Starboard Value back in September 2014.
Here’s how Darden CEO Eugene Kim answered:
“We have seen no weakness to date in what I would call the oil-dominant markets…So we’re on the lookout for signs, especially probably in Texas would be the place that we would get the first signal, that the current energy situation is having an effect on employment and attitude. But we haven’t seen it yet.“
So at least as of mid-December, Texans were still enjoying their breadsticks.
Meanwhile, economists at the Dallas Fed forecast that job growth in the state will slow from 3.6% in 2014 to between 2 and 2.5% this year because of low oil prices.
In the Dallas Fed’s latest manufacturing survey, respondents in five of the eight sectors said they were worried that cheap oil may slow down their businesses. But in food manufacturing, the response was: “We are anticipating an excellent 2015 driven by lower energy costs, a decent economy and continued reasonable interest rates.”
And according to analysts at Citi, food and services stocks are the best relative performers when gas prices are low.
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