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US tech-sector job stats flattened by Verizon strike

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A strike by 45,000 workers at telecom giant Verizon helped flatten job creation in the US economy in August – literally. The Bureau of Labor Statistics has issued its monthly jobs report, and says that not only did the US economy fail to add any net-new workers last month, it also revised the number of jobs created in June and July downwards.

The BLS is part of the US Department of Labor, and it does surveys of employers to figure out how many jobs are created and surveys of households to calculate the unemployment rate. The jobs report counts workers in government and private industry, factoring out farm workers who work seasonally. (Or at least used to. The reality of the modern family farm is that farmer families have second full-time jobs to make ends meet.)

In August, if you factor out the job cuts by local, state, and federal governments, then the private sector – excluding farmers – added a meager 17,000 jobs in August. It is generally agreed that the US economy needs to add around 200,000 jobs per month to just keep pace with population growth, and it would need at least two or three times that rate to make a dent in the pool of 14 million unemployed workers that the government acknowledges exists. And it would need even more than that to find work for those who have fallen out of the statistics altogether because they have stopped looking for work.

After revisions in its employment model, the BLS says that the US economy created 85,000 fewer jobs in June and July, with only 20,000 net new jobs in June (including government workers) and 85,000 in July.

The unemployment rate is derived from the household survey and remained the same at 9.1 per cent, where it has been stuck for several months.

Last month, the healthcare sector added 30,000 jobs, with the mining industry adding 8,000 and those in the professional and business services adding 8,000. The information sector – which includes publishing in its many forms, telecommunications, data processing and hosting – took a 48,000 whack in August thanks to the Verizon strike, which is over at the moment. Manufacturers chopped 3,000 workers last month.

The BLS does not track job creation and destruction by title, so we cannot get a direct sense of how the IT career track is faring compared to alternatives. But we can drill down into the establishment data – as the employer survey data and its model is called – to see how IT vendors are doing.

Within the manufacturing sector, there were 1.13 million people employed making computer and electronic products, up a mere 700 according to the BLS model compared to the revised July report. Within this group, computer and peripheral makers cut 300 jobs, to leave a total of 172,600 workers, and communication equipment makers cut 200 jobs, to 117,100 workers. Semiconductor and electronic component makers added 2,700 workers to make 390,600.

In the information sector, the telecom industry actually cut 3,000 jobs as well as having 45,000 workers on strike at Verizon, to give a total of 814,600 workers getting paychecks last month. Companies that run data processing and hosting businesses cut 600 jobs, to 238,100.

Firms engaged in computer systems design and related services added 9,900 workers in August, with 1.52 million total workers. Management and technical consulting firms, which often have an IT component to their work, added 3,100 workers, giving them a total of just over 1 million total employees. ®

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