Tech Jobs Rise in August, Consulting Fuels Growth

Technology employment increased 3.2 percent to nearly 12.8 million jobs in August, fueled by service-related jobs, according to figures released Friday by the U.S. Department of Labor.

Management and technical consulting services led the way, posting a 6.4 percent year-over-year increase in August to reach 1.15 million jobs. Computer systems design and related services were not too far behind with a 5.1 percent increase, resulting in 1.6 million jobs.

The largest area of tech employment, professional and technical services, posted more modest growth of 3.2 percent during the month to reach 7.98 million jobs.

But one thing of particular note is that all three of these sectors posted continual back-to-back job growth for the past three months. Other sectors of tech, however, didn’t fare as well, particularly computer and electronic jobs.

“The sectors which depend on sales of actual physical equipment fared worse,” says Bodhisattva Ganguli, an economist with Moody’s. “This is because of the sluggish economy and lower sales of equipment. Also, most companies replaced their equipment stock earlier in the business cycle.”

Indeed. Chip giant Intel lowered its forecast, adding to concerns about weak demand among tech companies.

Ganguli added: “Sectors which are more dependent on services fared better. This is a good sign, implying that employers are starting to replace some of the jobs they had erased during the recession.”

Here’s the number of jobs for the various tech sectors in the month of August:

As for the rest of the year, Ganguli says growth in the manufacturing components will be slow at best and face more risks, particularly from the situation in Europe. Growth in the services components, meanwhile, will see modest growth.

National Scene

Overall, the nation’s labor report was considered disappointing.

According to the labor report, only 96,000 jobs were created in the U.S. economy in August for all industries – raising the possibility that employer wariness could be feeding on itself.

The overall unemployment rate, however, fell to 8.1 percent in August from 8.3 percent in July, largely through fewer people looking for work, experts say. Tech unemployment, however, remains about half of that.

At the same time, however, in its monthly report on announced job cuts, outplacement firm Challenger, Gray & Christmas pointed to big overseas job cuts at Sony, Sharp and Research in Motion, citing global conditions that could spill over into U.S. employment decisions.

Challenger, Gray & Christmas says announced job cuts in the U.S. declined in August to a 20-month low of 32,239.The bad news? Computer companies lead in layoffs among the sectors studied, with 4,584 job cuts in August. About 4,000 of those cuts, though, were related to Google’s acquisition of Motorola Mobility.

Since the first of the year, computer firms have announced 37,670 job cuts, compared with 11,297 positions eliminated during the first eight months of 2011.

The good news? A report from the nonprofit Brookings Institution on 100 metropolitan markets finds that those with highly educated work forces, such as tech hubs including Silicon Valley, San Francisco and Washington, D.C., lift the tide for workers at all levels.

Related Links

Image: Computer class by Bigstock

Comments

  1. BY TheTruth says:

    “professional and technical services”

    Susan, those are code words for outsourcing companies; such as Infosys and Tata. They do not hire US workers, they exclusively utilize the L1 and H1b outsourcing visa. So an increase from them means more US worker displacement. Not really good news from my perspective.

  2. BY James Green1 says:

    This is good news only if you are already employed, and want to switch jobs. If you have not been employed for over six months or a new Computer Science Graduate you might as well forget it.

  3. BY Fact Check says:

    This just reaffirms my thoughts. The companies that are hiring are outsourcing companies. American workers will not even be considered for any of these ‘jobs’. For example, 98% of Infosys employees in the US are here on an outsourcing visas.

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