We study the effects of oil price shocks on the creation and destruction of U.S. manufacturing jobs from 1972 to 1988. Oil shocks account for 20–25 percent of the variability in employment growth, twice as much as monetary shocks. The two-year employment response to an oil price increase rises (in magnitude) with capital intensity, energy intensity and product durability. Job destruction shows much greater short-run sensitivity to oil and monetary shocks than job creation except at young, small plants. Employment growth responds asymmetrically to oil price ups and downs, and oil shocks trigger considerable job reallocation activity.