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IT losses despite US economic thaw

Pays to be a house builder

The US economy has started thawing but the first green shoots have struggled to make their presence felt in the tech sector.

The the US Department of Labor's Bureau of Labor Statistics monthly jobs report has found that in March the unemployment level remained the same as for the past two months, at 9.7 per cent.

The Bureau found government, manufacturing as a whole and even construction - hit hard thanks to overbuilding during the subprime housing bubble - adding tens of thousands of jobs.

Companies in the computer and information industries, though, continued to make cuts while making a relatively small number of hires.

Among manufacturers who make computer and electronic products employment was up a mere 800 to 1.1 million.

Computer and peripheral makers added 300 jobs, to 157,500, communications equipment makers shed 600 jobs, to 118,900, while semiconductor and electronic component makers added 1,000 jobs, boosting their aggregate payroll in the country to 361,300.

Within the very broad information segment of the economy, which includes movies, music, publishing, broadcasting, telecoms, and data processing, the telecommunications industry lost 5,000 jobs, to 943,300, while data processing, hosting, and related services companies cut 600 jobs, to 247,500.

The professional and business services segment, which has a total of 16.35 million people working within it, has some IT-related parts. Companies providing computer systems design and related services cut 9,600 jobs in the quarter, a small portion of the 1.43 million people in this field but significantly nonetheless.

Employment is still up from where it was a year ago - but by a smidgen. Management and technical consulting firms, which increasingly sell IT services as part of their broader offerings, added 1,200 jobs, to 974,900 in aggregate.

For the US economy as a whole in March, the overall forecast for job growth was 184,000. More than 100,000 of those estimated new jobs were expected to come from people hired to take the census, and because of freakish weather in February across the country that forced people out of work who were brought back on the payrolls in March.

The actual number of people hired to do the census was 48,000, half the expected number. The Census Bureau will be skewing the numbers for some time to come, by the way, with as many as one million temporary - but full-time - workers expected to be given jobs to count the populating and answer some basic demographic questions about the state of the country.

The census may turn out to be a more reliable means of creating jobs than the Obama Administration's $787bn stimulus program, some cynics will no doubt say. And given the weather's effect on employment in February and the census workers being added, calculating how many real, net new jobs that the economy added in March seems to be subject to debate.

This means we'll have to wait until the April report to see if there is a trend building and momentum in creating jobs. Everyone is clearly rooting for something like a steady state of a few hundred thousand jobs being added per month over the next several years.

By industry, healthcare companies continued to add jobs with 27,000 more workers in March, mining added 8,000 jobs and even manufacturers added 17,000 jobs.

For the first quarter, manufacturers added 45,000 jobs while construction companies added 15,000 jobs. Construction firms slashed 75,000 jobs in the prior twelve months. Financial services cut 21,000 jobs, presumably so they could pay those big bonuses executives apparently deserve.

With 15 million people officially out of work in America, it will take millions of new jobs and probably many years before the unemployment rate gets down to the structural jobless rate of between four and five per cent. ®

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