This study examines the impact of the sharp rise in energy costs on employment in manufacturing. The slow rate of employment growth since 1973 was due mostly to the slow rate of growth in the general economy, rather than to high energy costs. On the other hand, the most energy-intensive industries averaged a decrease in employment in the 1974-78 period, while the less intensive ones averaged a small increase. Also, the most energy-intensive industries showed smaller increases in output than other industries, and higher product price increases. Nearly half the employment in the most energy-intensive industries is in nonmetro areas, about twice the proportion for all manufacturing.