Employment keeps improving, but the good news is not good enough for everybody
It's the first Friday of the month, and that means the U.S. Bureau of Labor Statistics is out with the latest Employment Situation Summary to capture last month's job growth, unemployment stats, and all the other facts and figures that come with it. While economists had been predicting job growth in the range of 220,000 to 230,000 new jobs, with no change to the general unemployment number, actual job growth came in at 214,000 new jobs instead. Thanks to upward revisions for the two preceding months, however, adding in a total of 31,000 previously uncounted new jobs, unemployment declined by one-tenth of a percent, from 5.9 to 5.8 percent. (The August tally of new jobs went up from 180,000 to 203,000, while September's count rose from 248,000 to 256,000.)
If you feel inclined to treat this as good news, then you'd be at least partially on track. As I write this post, however, the Dow-Jones Industrial Average is down a little (mostly flat for today), and I think that reflects the general trend on employment nowdays. This is best summarized as, "Good news and good growth, but neither dramatic nor quick enough to excite either exuberance or enthusiasm." There are still too many people locked into less-than-full employment, or out of work for more than 27 weeks (the boundary at which the government's definition of "long-term unemployment" kicks in).
The big issue hinges on the consumer's role in the overall economy: While there are jobs enough to go around, wages continue to stay flat and the middle class is not enjoying any of the kinds of benefits that usually come along with a growth cycle. Specifically, disposable income is shrinking — and while this holds consumer confidence down, it also has the even more negative impact of containing and constraining consumer spending. Which is the real engine that drives growth in the economies of developed countries like the United States, Canada and the nations of Europe and the Pacific Rim.
In fact, some analysts are inclined to see the recent resurgence of the Republican party in this week's mid-term elections as a mandate for more growth- and business-friendly economic policies. The hope appears to be that the party of business might be able to help speed things up economically if they can control both houses of the national legislature — not to mention the majority of U.S. states' political institutions. And indeed the markets did bounce upward nicely following the results on Wednesday.
The latest employment figures, however, seem to have generated nothing more than a big ho-hum from Wall Street this morning. It remains to be seen whether a change in the cast of characters can shake things up and get job and economic growth movin' and groovin'. It's an outcome that's far from certain, however hopeful the newly-invigorated mainstream Republican machine may find itself feeling these days.
On the IT front, the contents of Table A-14 in the Employment Situation Summary did hold a nice little surprise this morning. By dividing the number of unemployed persons for October 2013 and 2014 by the unemployment rates for the same dates in that table for the Information industry, we can get a rough estimate of the size of the IT workforce at those points in time. For October 2013, the unemployed count was 217,000 suggesting an unemployment rate of 7.9 percent; for the same month in 2014, those numbers are 139,000 and 4.7 percent, respectively.
Do the math, and you'll realize that the size of the Information (IT) workforce for October 2013 was 2.75 million, while in October 2014 that number is 2.92 million. According to my calculator, that indicates that something in the neighborhood of 210,000 jobs in Information have been created in the past 12 months, while unemployment in our sector has also dropped by about 4 percent. If you work in information, you can't help but be somewhat cheered by those numbers and what they represent.
If only, if only we could get out of what I've been calling "slow growth mode" for the past three years or so, and into something a little more brisk, I think a lot of people would cheer up a bit more. Especially if wages would start picking up to reflect more of a seller's market for employment, particularly in IT, I think that could put a real spring into all of our steps. At this point, we can do little except wait and see what happens next, and keep hoping for the best, while dreading (and preparing for) the worst.