U.S. Employment Numbers for February a Mixed Bag
The latest job figures from the U.S. Government are out, and they continue to tell a story of steady but agonizingly slow job growth. This is accompanied by a jerky pattern of wage stagnation punctuated by small and only occasional spurts of growth or improvement, which are invariably offset by countervailing hiccups and retreats.
For the past quarter, for example, monthly job growth has averaged 228,00 jobs, thanks to 242,000 jobs added for February 2016, with a slight upward rejiggering of January numbers from a dismal 151,000 to a less dismal 172,000. December's numbers also gained a bit, from 262,000 to 271,000.
For February, average hourly wages dipped by $0.30 to $25.35, after a nice bounce of $0.12 in January. This puts wage growth over the past year at 2.2 percent, somewhat above the current prevailing inflation rate of 1.4 percent over the same period (as per the U.S. Inflation Calculator for January 2015-January 2016).
Looking at the numbers from Table A-14 ("Unemployed persons by industry and class of worker�") we see the same story playing out for the Information sector. The numbers for February 2015 are 130,000 unemployed with an unemployment rate of 4.5 percent, while those numbers for February 2016 are 103,000 unemployed with an unemployment rate of 3.7 percent.
That looks like unmitigated improvement, right? Both the numbers of unemployed and the unemployment rate are down. Closer analysis of those numbers, however, reveals that in February 2015 the size of the total population for this sector, calculated by dividing the number of unemployed by the corresponding unemployment rate, is 2.89 million.
The same calculation for February 2016 produces a total population of 2.78 million. Hence, the apparent good news — reduced overall count of unemployed and reduced overall unemployment rate for the Information sector — actually reveals a workforce that has shrunk by 105,000 jobs or thereabouts over the past 12 months.
Is that really good news? Maybe not!
I still believe that with unemployment rates this low (overall unemployment is still at 4.9 percent, and is now under 4 percent for the Information sector), there's not much more that companies and organizations can do to squeeze more productivity out of the current IT workforce.
Sometime soon, hopefully sometime this year, hiring is going to have to start heating up for IT workers in general. Unfortunately, that's only going to happen if employers become convinced that adding headcount is necessary to accommodate increasing demand for the goods and services they offer.
Otherwise, I see things remaining stuck in limbo until some other force break the ranks of the current stalemate. I wish I had the answers to "What could make that happen?" and "When will this occur?" I imagine most labor economists and business forecasters feel the same way.
My old, ongoing mantra of "Hunker down, stay put, and keep calm" looks depressingly likely to remain relevant for some time yet. Sigh.