October News Grim For IT Jobs Prospects
November 18, 2013 Jenny Thomas
Depending on who you ask, the jobs report for October was good news or another in a long line of disappointments. With the federal shutdown and all the government shenanigans, last month was a crazy time and most economists didn’t have much hope for job growth. But in the end, the Bureau of Labor Statistics (BLS) reported 204,000 new jobs across a wide spectrum of industries in October.
But when you talk to Victor Janulaitis, the CEO of Janco Associates who makes it his business to stay on top of trends in the IT ecosystem, the latest BLS data paints a grim picture of the IT job market. Janco analysts crunched the BLS numbers and found there were only 5,200 IT jobs gained in October, and also found September’s IT jobs number was adjusted down from a gain of 2,500 jobs, which we reported aboutlast month to a loss of 3,600 jobs.
In case you think you read that wrong, this visual aide will hammer home the September slide.
The three-month moving average points to a worsening of the hiring environment, and in the last 12 months, Janco says only 77,600 IT jobs have been added to the U.S. economy.
“Based on recent interviews of 84 CIOs in the last two weeks, we see that CIOs have become more cautious,” said Janulaitis. “Over two-thirds of the CIOs interviewed say that the network infrastructure they have in place, which many have not been able to update because of budget limitations, is making it more difficult to implement new technologies without significantly increase costs. They all need larger budgets and staff to deal with this but are reluctant to hire new employees.”
Janulaitis said the increased caution can be attributed to the uncertainty caused by uncontrollable events including the current state of the recovery and issues associated with the new healthcare laws.
Both the number of unemployed persons, at 11.3 million, and the unemployment rate, at 7.3 percent, changed little in October unemployment was 7.2 percent in September). Among the unemployed, however, the number who reported being on temporary layoff increased by 448,000 in October. This figure includes furloughed federal employees who were classified as unemployed on temporary layoff under the definitions used in the household survey.
The overall labor participation rate continues to be lower this year, with Janco analysts reporting the labor market participation rate at a new 30-year low of 62.8 percent. “This alone will make it a very difficult process and does not bode well for IT expansion and hiring,” Janulaitis said.
Healthcare employment gives us an opportunity to wrap this up with a bright note. The BLS reported an October increase of more than 15,000 overall jobs in the health care category (not specifically IT although one could guess a few would fall into that category). Job growth in health care has averaged 17,000 per month in 2013, which isn’t so impressive when compared with an average monthly gain of 27,000 in 2012.
Janulaitis attributes the implementation of electronic patient records as one of the driving forces in the increased IT health care job opportunities.