Private Sector Jobs Declined in September: Report

Figures on hiring trended downward last month, and IT spending is looking grim as several major vendors lower expectations for growth.

The private sector shed 39,000 jobs between August and September, according to a monthly employment report from payroll giant Automatic Data Processing, which tracks private-sector hiring with the aid of economists from Macroeconomic Advisers. The report receives data from 500,000 U.S. businesses and more than 2 million private-sector employees.

The only industry sector of the economy that saw job growth in September was the service-providing sector, which had gains of 6,000 jobs. Construction, manufacturing and goods-producing industries all saw declines. Medium-sized and small businesses took the largest hit last month, each losing 14,000 jobs; large businesses shed 11,000 jobs. The ADP report does not mince words on the status of overall employment in the United States:

"The September decline in employment followed seven monthly increases from February through August. However, over those seven months, the average monthly gain in employment was 34,000. There simply is no momentum in employment."

The ADP report is a closely watched information set by investors and economists, and is a precursor to monthly data set to be released by the U.S. Department of Labor's Bureau of Labor Statistics later this week. ADP's report does not include federal employment information, but was quick to point out that government employment numbers had been seeing a decline from the closure of many census-related jobs from the spring months when a significant number of temporary census workers were employed in every state.

So what is happening to IT? Job vacancies, as measured by online job openings for technology, expanded by 15,200 positions nationally last month, according to a monthly report from The Conference Board, a nonprofit organization. However, open positions do not necessarily translate into major gains in jobs being filled.

In terms of current job demand, systems, network, programming and project management skills are hot.

"Our latest nationwide survey of employers, completed in September, shows 38 percent of IT employers plan to hire full-time, permanent employees in the fourth quarter; 11 percent expect to decrease head count," said CareerBuilder spokesperson Jennifer Grasz in an interview with eWEEK. "We see continued demand for computer programmers, software developers, network engineers, network systems analysts, system security analysts, project managers, Web-related occupations."

Business spending is up a little, but IT spending is slowing down, according to Seeking Alpha writer Michael Shulman, who writes about the economy from an investor's perspective. He sees key economic indicators, including credit, general optimism, government spending, consumer spending, business spending and exports all trending downward.

Shulman wrote in his blog post "Inside the Latest ADP Report": "This [business spending] is up slightly, but the traditional motor, IT spending, is taking a hit according to ChangeWave and other surveys as well as forecasts from companies such as Intel and Cisco... The bottom line: The double dip is here. If not in the data, then in the real world, and the market seems to like this for it ensures more liquidity from central bankers. That being said, stocks trading based on real-world earnings, such as industrial cyclicals, luxury goods retailers and IT companies, are in for a rough ride."

Analysts had predicted that jobs were going to rise by about 50,000, but the ADP report showed the economy-at least in terms of hiring-is waning.