Economists were bracing for deep jobs cuts in the U.S. economy during the month of July, but could relax this morning as the numbers coming out of the Bureau of Labor Statistics were not as bad as expected, and not an unhappy surprise like Americans got in June.
The situation is still bad, with 247,000 people losing their jobs in July and with the unemployment rate only backing off one-tenth of a per cent to 9.4 percent, as jobs were added slightly faster than they were taken away.
Job loss figures put out by the BLS have been revised as each month went by, often with higher figures than originally reported for the month, often more than once and usually for the worse. But after all the revisions, job cuts in the States peaked in January, with 741,000 people being given the sack, and had been trending downward nicely until June came in and messed everything up, with U.S. employers cutting 467,000 jobs.
That was quite a splash of cold water on the Obama administration's economic stimulus program, but today's news has no doubt put a little spring into the step of the occupants of the White House, particularly with economists expecting well over 300,000 job cuts into July.
The BLS did a little trend math to show the employment situation is getting better. If you average the job losses from November 2008 through April 2009, the U.S. economy haemorrhaged 645,000 jobs per month; but in the period from May through July 2009, job losses have only averaged 331,000 per month.
Just for fun, I printed out the first page of the July jobs report, which you can get here, and got out my pencil and ruler to eyeball the trends myself. If the U.S. economy continues to behave as it has since February, then in November there should be few or no job losses and the economy should start adding jobs in December or January. Then again, the U.S. economy shed jobs every month through early 2008, and could continue to shed jobs through early 2010 as businesses adjust and readjust to shifting conditions. That would be my guess, but not my hope.
No matter what happens in future months in terms of job losses, if jobs do go positive in December of this year, it took two years to shed millions of jobs and to drive the unemployment rate up from just under 5 per cent to the peak of 9.5 per cent, and it will probably take at least that long for employers to get comfortable about hiring again and drive the unemployment rate back down to 5 per cent or so.
You have to always keep in mind that these are preliminary figures for both June and July, and there is every possibility that the BLS looks at its June and July numbers in August and finds they were worse than expected, throwing off all the trends discussed above.
The IT-related portions of the U.S. economy continued to hand out pink slips in July, with computer and electronics products manufacturers shedding 5,100 jobs (this is the raw, not adjusted, data from the BLS) and keeping 1.14 million people on the payroll. Computer and peripheral equipment makers cut 800 jobs in July, down to 162,500; communications equipment makers shed a mere 200 jobs, to 126,600; and semiconductor and electronic components makers removed 3,800 employees, to 371,700. Telecommunications companies cut 5,200 jobs, to 978,000, while companies in the data processing, hosting, and related industry sector lost 1,300 jobs, to 254,500.
Computer systems design and related services companies actually added jobs - 12,900 jobs, to be precise - and boosted their aggregate payroll to 1,465,300 people. Management and technical consulting firms also added 7,800 jobs to just over 1,023,500.
Getting a sense of the employment situation in the IT market at large is not possible given the way the BLS reports its data, which is broken down by industry rather than by job type. ®