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US economy adds 290,000 jobs in April

Telcos down, computers up

Bridging the IT gap between rising business demands and ageing tools

The addition of workers to perform the census and a boost in the employment of temporary workers helped the US economy add 290,000 jobs in April, according to a report from the Labor Department this morning.

But ex-workers piled back into the labor pool, many looking for jobs for the first time in many months thanks to the improving economy; and that ironically pushed the unemployment rate up two-tenths of a point to 9.9 per cent.

In April, the number of long-term unemployed (meaning they have not worked for 27 weeks or more) continued to rise, with an estimated 195,000 people re-entering the workforce according to the monthly jobs report (pdf) from the Bureau of Economic Statistics. The official reckoning by the BLS is that there are 15.3 million people without jobs who want them through the end of April, and a little less than half of these have been unemployed for 27 weeks or more.

Since December, the US economy has added 573,000 jobs (excluding seasonal farm workers, which are tracked separately by the BLS), which is sure better than the millions of jobs that were lost in 2008 and 2009. But it is going to take a long time - very likely many years - for companies in the US to create millions of new jobs to get back to where things were before the recession stated in December 2007; and it is arguable that the US economy will not be able to add the millions of jobs per year that are necessary to accommodate the needs of its growing population.

While no one is talking about it, unless the economy picks up substantially - and in a more broad manner than the jobless recoveries of the 2000s - the new level of structural unemployment in the States may set a new floor that is higher than the four to five per cent economists talk about.

With the IT sector woven tightly into the global economy, and growing and shrinking more or less in synch with economies, there is no way the companies associated with the IT industry can defy gravity and keep adding jobs as they often did during the early and middle years of the IT sector. In April, while manufacturers as a whole added 53,000 jobs to just over 11.5 million workers, those making computer and electronic products shed 1,200 jobs, to just under 1.1 million workers.

Within this group, the BLS reckons that computer and peripheral equipment makers added a mere 100 jobs, to 158,000, in April, and communications equipment makers held steady at 119,100 jobs. Semiconductor and electronic component makers added 600 workers, but those making electronic instruments shed 1,300 jobs.

Within the information economic sub-sector category used by the BLS, which includes movies, TV, radio, internet hosting, telecommunications, and data processing services in a giant lump, telcos continued to slash jobs, chopping 11,700 employees in April, to 931,000. Companies engaged in data processing and hosting operations added 2,500 jobs, boosting employment to 250,400 according to the BLS.

Within the professional and business services sub-sector of the US economy, 279,000 jobs were added, to 16.63 million. This is clearly one area where the economy is warming up.

Companies engaged in computer systems design and related activities are within this sub-sector, and they added 12,100 jobs in April, to 1.44 million. Management and technical services companies (which include some IT components) added 2,600 jobs, to 977,000. ®

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