August 2014 IT Employment: Numbers, trends, and overall outlook
Here's how the July employment numbers reported reported by the U.S. Department of Labor in the Aug. 1 Employment Situation Summary look: 209,000 new nonfarm payroll jobs were added, matching the average monthly gain over the last year. (Note: Starting in September, public access to this report will be funneled through the BLS archives.) Overall unemployment is unchanged from June's level of 6.2 percent. Other commenters on this report have noted with some satisfaction the growth in both the manufacturing (28,000 jobs added, more than double the average for the preceding 12 months) and construction (22,000 jobs added, 25 percent better than the 12-month leading average) sectors.
Because these are engines that help drive overall economic growth, improvements provide further evidence that the pace and strength of what's been a long and slow recovery since the downturn of 2008-2009 are finally improving, if still fairly modestly. On the overall employment front, news and commentary remains mixed, with a blend of upbeat and dolorous news. Here's a sampling of headlines from the Economy section at Gallup Economy that reflects recent findings from that well-known polling organization:
- Of Americans, 45 percent Say They're Spending More Than Year Ago (Aug. 15)
- U.S. Economic Confidence Index Ticks Down to -17 (Aug. 12)
- U.S. Investors Seem Unaware of Bull Market's Strong Gains (Aug. 11)
- U.S. Small-Business Owners' Optimism Continues Slow Rise (8/7/2014)
- U.S. Hispanics Positive About Their Standard of Living (Aug. 7)
- U.S. Job Creation Index Advances to six-Year High in Jul (Aug. 6)
Of all these stories, the job creation index item is probably the most interesting, because it reflects a return to the status quo that prevailed before markets and the economy started heading south in 2008. This is the first year that Gallup has seen better numbers than those that applied in 2008, when the downward trend in numbers made its appearance (see the table for the Gallup Job Creation Index in the afore-linked article for more details). For the week ending Aug. 3, Gallup found that the upward trend continued with "the index hitting +30, a weekly record since 2008," but they also observe that "there is still significant room for this critical measure of the nation's economic health to improve."
Jumping back to the latest BLS summary report, and digging into its information sector breakdown, I observe that for July 2013, 388,000 unemployed information workers represented 6.4 percent unemployment, indicating an information workforce size of 6.06 million. For 2014, 372,000 unemployed information workers represented 6.0 percent unemployment for that sector, indicating an information workforce size of 6.2 million. This indicates slightly reduced unemployment (a dip of 0.4 percent) despite an increase in the overall number of workers employed in the information sector: 138,000 information jobs have apparently been added from July 2013 to July 2014.
Here again, improvements are occurring, but at a modest pace. The biggest problem, as I see it, is that there remains a sizable chunk of the workforce that has yet to find its way back to full employment after losing jobs or switching to part-time or temporary work in the wake of the recent economic downturn. This is occurring at the same time that the country needs to create at least 125,000 new jobs every month just to accommodate new entrants to the workforce (primarily, that means young people taking up full-time employment for the first time, rather than those re-entering the workforce). A 2012 Brookings study estimated that creating 208,000 jobs per month — eerily close to the 209,000 reported for July 2014 — would not close the "jobs gap" (the difference between people looking for work and new jobs available for them to fill) until 2020!
What's the overall consensus to be gained here? Things are getting better, but too slowly to either buoy consumer confidence, or massively boost business investments in infrastructure or new hiring. Either we'll have to learn to live with this kind of economy, or external forces will either push it up (the outcome desired by most), or pull it down (the outcome feared by many). We'll see: Stay tuned, and I'll keep you up-to-date on the numbers, and what they have to tell us.