DALLAS, Jan. 15 (UPI) -- The Federal Reserve Bank of Dallas said in its latest forecast it was less optimistic about its outlook for the year because of the low price of oil.
The bank said early this week it expected job growth would be modest and drilling and extraction in the state, the nation's top oil producer, should fall "sharply" if oil prices stay below the $50 per barrel mark.
In its so-called Beige Book, the bank said Wednesday demand for oil services in the Permian and Eagle Ford shale basins declined.
"Outlooks for the first half of 2015 are very uncertain and significantly weaker than in the prior reporting period, with firms expecting anywhere from a 15 to 40 percent decline in demand for their services," the bank said.
Oil services company Halliburton this week announced plans to cut back on spending and labor as crude oil prices continued to trade in a bear market.
Overall, the Dallas bank said employment across the board was holding steady, but there was more uncertainty than in previous reports, with leaders across several sectors expressing concern about the impact of low oil prices.
The Federal Reserve, in its Beige Book, a bellwether of the nation's economy, said the overall demand for energy-related products was weak, with losses reported elsewhere besides the Dallas bank.
"However, contacts in the San Francisco District reported that energy demand from manufacturers was solid," the Fed said.
In the manufacturing sector, the Federal Reserve said it expected modest to strong growth for the year, though there were some in the industry expressing concerns because of a weak global economy and the decline in crude oil prices.
For automotive, the sentiment for 2015 was bullish as low oil prices are changing consumer habits in terms of vehicle purchases.
Overall, the Federal Reserve said the low price of oil was good for consumers.
"Most retail respondents are optimistic about the outlook for 2015, given that business is currently good and consumer sentiment seems more positive, partly because the cost of oil is low," it said.
