Don't panic: There’s more to May's dismal IT jobs numbers

Government stats for IT jobs in May took a nosedive. But take away the impact of the Verizon workers' strike and the picture is less dire, though still not rosy

Don't panic yet -- the U.S. IT sector didn't really lose 37,200 jobs last month. But everything's not hunky-dory either.

The Bureau of Labor Statistics' May 2016 employment report showed the IT sector shedding 37,200 jobs, with a staggering 22,500 jobs disappearing from telecommunications payrolls, specifically. The good news is that the vast majority of that plunge can be explained by a single anomaly: Verizon Communications workers' strike that lasted 49 days.

The workers involved in those strikes were absent from payrolls and, thus, missing from the BLS's monthly survey. The majority of them are now back at work, meaning most of those missing jobs are likely to reappear in the June numbers. (It's not clear whether all of them will return, though.)

The hard part will be figuring out in the interim what the real job gains -- or losses -- were for the month. Tech job stats analyst Foote Partners decided to give a ballpark estimate, electing to change out this month's reported job losses in telecom for an average of that sector's job losses across the first four months of the year, around 1,275 jobs per month.

"The result for May would have been a gain of 13,425 tech jobs across all four industry job segments commonly associated with technology professionals," wrote Foote Partners. "That would make May the second largest month of tech job gains so far this year, exceeding the five-month average of 12,185 jobs by more than 1,240 jobs."

In addition to telecommunications, the other BLS segments generally considered to be part of the IT market are Management and Technical Consulting Services and Computer Systems Design/Related Services, which added a total of 14,600 jobs for the month, and Data Processing, Hosting and Related Services, which added only 600 jobs.

Of the categories that Foote tracks, Management and Technical Consulting Services remains the strongest, with 20,600 jobs added in April. May wasn't as impressive -- around 7,200 jobs were added -- but over the past couple of years that category has typically been in the mid-four digits, occasionally ranging up to five. Consequently, that huge April number seems like a one-time fluke, which Foote describes as a "bonanza."

Because the categories themselves are holdovers from a previous era of IT, it remains possible that many jobs in IT might not be accounted for and are filed elsewhere. Foote believes the IT market is far stronger than it might seem because of this consistent miscategorization.

However, Janco Associates -- which also track IT figures but uses a slightly different category set -- has painted a grim picture for some time now about the overall state of the IT job market. Set aside May's figures, and the three-month average for growth in the field is still trending downward, Janco says. The  number of job gains for each month this year is down by anywhere from 9,000 to 16,000 from the previous year.

It's probably prudent to wait until June, when the end of the Verizon strike ameliorates the monthly tallies, before making definitive statements about the direction of the IT workforce. If U.S. hiring is indeed slowing, it's best to work with a less noisy set of stats to determine if the traditional robustness of IT hiring is also being impacted.

Copyright © 2016 IDG Communications, Inc.

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