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10/3/2008
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U.S. IT Jobs Dip 2% As Downturn Hits

Cuts in computer scientists and systems analysts, support specialists, and software engineers fueled the decline, a new Bureau of Labor Statistics report shows.

The number of people employed in U.S. information technology jobs dropped 2% from the second quarter, one of the first signs that the broader economic slowdown is leading to IT job cuts, according to a government report issued Friday.

U.S. IT employment had kept growing over the first half of the year, according to Bureau of Labor Statistics quarterly household survey data, but in the past three months fell to just over 4 million, from 4.1 million last quarter, led by cuts in computer scientists and systems analysts, support specialists, and software engineers.

The IT job losses come amid rising unemployment across the U.S. economy, including the managerial and professional ranks. Managerial and professional unemployment hit 3%, from 2% at the beginning of the year, according to the bureau's data. IT unemployment at 2.3% is around the level it has been all year, as the pool of total IT workers -- employed and unemployed -- seems to react quickly to the availability of jobs. The overall unemployment rate stayed at 6.1%, a five-year high.

Compared with a year ago, IT employment's up 6%, led by growth in software engineers, support specialists, and network and data communications analysts, despite declines in the first two of those this quarter. Employers have added 216,000 IT jobs since the third quarter of 2007.

The IT jobs picture would've been much worse this quarter except for surprising growth in computer programmer jobs, which spiked by 94,000 this quarter. Of the eight IT job categories tracked by the BLS, programming jobs are the most volatile -- the segment lost 55,000 last quarter, and it has twice had single-quarter losses of more than 100,000 jobs as part of a long-term decline over the past eight years. But a 94,000-job gain is the largest quarterly growth in the past eight years.

Before this quarter, IT jobs had showed a surprising resilience to the economic slowdown, especially given the turmoil in the financial services market, a major employer of IT pros. IT jobs have been on an overall upward trend, with only three of the past 12 quarters showing job declines. The largest was a 4% decline in the second quarter of 2006.

Across the economy, employment in construction, manufacturing, and retail trade continued to decline, while mining and health care continued adding jobs, the Labor Department said. The poor employment outlook could pressure the Federal Reserve to cut target interest rates this month in hopes of spurring economic growth. It also likely played a role, along with extreme volatility on the stock markets this week, in the House of Representatives reversing course and approving a bank bailout bill after rejecting a version earlier this week.

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