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Another 524,000 US jobs go

Grim December - but IT holding up

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The US Department of Labor put out its monthly jobs report this morning, which was widely anticipated to not be good news. The department's Bureau of Labor Statistics said that non-farm payrolls fell by 524,000 in December and that 1.9m jobs had been nuked in the final four months of the year, pushing the unemployment rate in the States up to 7.2 per cent of the workforce.

For the full year, the American economy has shed 2.6m jobs, and the employment rate since the recession started in December 2007 has risen from a relatively modest 4.9 per cent. Much has been made this morning of the fact that the 2.6m job losses represents the largest number of jobs to go since 1945, after the World War II machine was cranked down, but the US population was much smaller and so was its workforce way back then, so those losses resulted in a much higher unemployment rate.

The fact that the current 7.2 per cent unemployment rate is the highest we have seen in 16 years is significant, and so is the expectation that the number will very likely continue to grow in 2009. Incidentally, the bureau revised upwards its job loss figures for October and November, as often happens with these monthly reports.

It is not a simple task to reckon how information technology professionals are doing in the American job market, since the bureau does not classify workers by job, but rather by the industry sector they work in or by other demographics, such as sex and age. But you can get some sense of how IT vendors are doing from the data put together by the Labor Department by looking at sub-industries that it does track (this includes companies that actually make IT gear).

The bureau also tracks jobs in what it calls the information industry, which includes publishing, broadcasting, telecoms, data processing, hosting, and other information services. The remaining category in the bureau's data is computer systems design and related services, a subset of the professional services category. You can look at the raw data for December right here (pdf).

According to the bureau's latest report, computer and peripheral equipment makers in the States removed 700 full-time people from the payrolls in December (these are seasonally adjusted figures), while communications equipment makers shed 1,700 jobs. Semiconductor and electronic components makers lost 4,700 jobs. Against a total 721,800 jobs in these three manufacturing subsectors, those job losses are tiny.

Manufacturers across all product categories shed 149,000 jobs in December against a total workforce that fell to just under 13m employees. That's about a one per cent drop for the IT-related manufacturers, and about 1.1 per cent for manufacturers in general. Other industries - like construction and financial services - have been much harder hit. Nonetheless, you don't want any industry sector to shed one per cent of its workforce every month.

Within the information industry's data processing sub-sector tracked by the bureau, jobs actually rose by 500 to a seasonally adjusted 266,500. In the computer system design and related services area, 2,900 jobs were cut in December, to just over 1.4m.

Of course, IT spans all industries, and the bureau's report provides no visibility into what job losses might look like inside the IT departments across all industries. Uncle Sam really doesn't know how many of the 2.6m jobs that went down the tubes in 2008 were in IT. ®

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