Plummeting oil prices bring both positives and negatives to economy

Crude oil fell another 8 percent last week and continues to drop. That comes on top of a 46 percent plunge last year. The drop in oil has pushed down gas prices by over 40 percent, but there could actually be some negative consequences from slumping energy prices.

CBS business analyst Jill Schlesinger joined the CBS Evening News Sunday to explain:

Jeff Glor: AAA says that the national average price of gas has fallen for a record 112 days to $2.08 per gallon, the lowest since May, 2009 and is down $1.23 from a year ago. But there is evidence that the one-booming U.S. oil industry is now feeling the pinch. What's the latest?

Jill Schlesinger: The Federal Reserve Bank of Dallas estimates that the energy sector will cut 250,000 jobs in 2015 in eight states; 50 percent of those jobs cuts are expected to happen in Texas. There have already been announcements from Houston's ConocoPhillips, which plans to spend 20 percent less this year than last next year and has already cut 230 people. Same with British Petroleum. Baker Hughes reported 61 rigs closed last week, in addition to the 17 announced in the prior week, which amounts to about 100 jobs per rig. Some smaller producers like American Eagle Energy have stopped drilling completely and some have been forced to seek bankruptcy protection.

Glor: But it's not just drill workers.

Schlesinger: Support industries, like manufacturing, metals, machinery, chemicals, electrical, pipes are also feeling the squeeze. U.S. Steel said it would cut more than 700 jobs and Houston based CIVEO, which builds logging for oil workers will lay off 45 percent of its workforce. The cuts could to spill over into other areas, like local real estate in Texas and North Dakota.

Glor: Despite the effects on the energy sector, what is the overall impact of lower oil and gas prices on the broader economy?

Schlesinger: More money in people's pockets is always a positive and a stimulus. Analysts say that the drop is a net positive for the economy. Goldman Sachs forecasts that if oil stays near its current price, the economy will add 300,000 more jobs this year than if the price had remained at its June level.