May employment numbers show continued improvement

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It's the first Friday of the month as I write this blog post, and that usually means the United States Bureau of Labor Statistics has released the job numbers for the previous month. The big picture is a net gain of 217,000 jobs for May 2014, down 65,000 from the revised April figure of 282,000: a 23% drop. That's a not insignificant dip, but the current month's figures are entirely in keeping with the trend for preceding months, if we ignore the bump in April asbeing  perhaps a temporary outlier.

The unemployment rate stands unchanged from April (which brought a HUGE 0.4 percent dip) at 6.3 percent, and the official count of unemployed persons also remained fixed at 9.8 million. The overall impression this report delivers is that not much of significance changed in the period from April to May for most major employment indices and counted cohorts. One nice figure: a decrease in what the USBLS calls the "long-term unemployed" (those out of work for 27 weeks or more, but still seeking employment) of 979,000 as compared to the same month in 2013. The 217,000 new jobs added number reported for May is 20,000 more than the average over the previous 12-month period, which currently stands at 197,000.

The information sector, and other IT-related job niches, are finally showing tangible signs of improvement. The latest report specifically calls out an increase of 7,000 jobs in computer systems design and related services. It also shows a drop of 0.9 percent in the overall unemployment rate for the Information industry as a whole (from 6.4 to 5.5 percent, below the overall unemployment figures for the entire workforce) from April 2013 to April 2014. Compared to the April numbers (see the archived report for that month), 12,000 new jobs were added, and unemployment in the sector dipped by a healthy 0.2 percent as well. These are nice month-over-month gains, and tell me that hiring really is picking up in IT (and in industries that ultimately drive IT, like the aforementioned uptick in computer systems design).

Combine these improvements with recent reports of a more positive hiring and spending outlook in IT for the rest of 2014 and into 2015, and I see encouraging signs that once again IT will help lead the way into a stronger, more robust economic situation. IT is often viewed as a "harbinger" sector, because improvements in this area often precede similar improvements in other sectors later on, and because declines in this area usually precede similar downturns in other sectors, too. Does this mean it's time to throw caution to the winds, and to break out the party hats and champagne?

Not exactly: the recovery continues in its perverse and perplexing form of "slow-mo" growth and improvement. Most economists want to see overall jobs added at or above 300,000 per month, and overall unemployment in the 5-percent range (that is, from 5.0 to 5.9 percent) before the consider a recovery to be "complete." We've been inching our way down from unemployment figures in the 8-9 percent range since 2009, and jobs added still needs a hefty boost (27 percent over the April numbers, and 34-35 percent over the twelve-month average) to hit the barest edge of the 300,000 "happy place" so beloved of labor economists.

In other words, things are still creeping towards health, but the tortoise is only about two-thirds of the way down the track to the finish line. There are reasons to be encouraged by what's going on with jobs and the economy in general — and with IT in particular — but the race is far from over. And of course, there's always the possibility that the creeping tortoise may wander off the track and wind up in a less pleasant part of the economic landscape!

 

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About the Author

Ed Tittel is a 30-plus-year computer industry veteran who's worked as a software developer, technical marketer, consultant, author, and researcher. Author of many books and articles, Ed also writes on certification topics for Tech Target, ComputerWorld and Win10.Guru. Check out his website at www.edtittel.com, where he also blogs daily on Windows 10 and 11 topics.