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IT employment dips in July, but tech sector sees a gain

In industries such as finance, retail, healthcare and others, IT employment broadly declined in July by 88,000 jobs, or 1.9%, according to tech industry trade group CompTIA.

The cuts last month reduced occupational IT employment by 46,000 jobs so far this year, to about 4.43 million.

That sounds alarming, right? Perhaps not -- if you widen the picture a bit.

In June, IT occupational employment showed a net gain of 74,000 jobs, and this month-to-month volatility is normal because of the way the U.S. Bureau of Labor Statistics (BLS) reports the data, according the industry group. The government data includes part-time workers, such as someone doing Web design on the side.

Part-time work accounts for about 13% of these IT positions, representing about 650,000 jobs, said Tim Herbert, CompTIA's senior vice president, research and market intelligence.

IT occupational employment is different from tech industry employment because the occupational category includes people who work for firms not part of the technology sector.

"Other than routine labor turnover, there does not appear to be one specific reason for the decline in IT occupation employment for July," said Herbert. He expects IT occupational employment to end the year in positive territory, similar to last year's 3.1% increase. That's based on BLS and private projections.

CompTIA's overall numbers increase with the addition of employees who work in the tech sector specifically. The IT sector -- technology-specific firms -- added about 4,000 jobs last month, and have added 47,100 so far in 2016. The IT sector employees 4.39 million, but that includes everyone who works in the tech industry. About 44% of those employees work in IT positions.

The overall unemployment rate for the U.S. economy is 4.9%, with the unemployment rate in IT occupations at about half that number, said Herbert.

"It's best not to draw too many conclusions from a single month's data," said Herbert.

David Foote, co-founder and chief analyst at IT employment research firm Foote Partners, believes the U.S. is undercounting people who work in technology areas. "It's ridiculous to think that there are only 4.5 million IT professionals out there," said Foote.

Foote believes the universe of people working in technology is much larger, totalling as many as 25 or 30 million. But they are employed outside IT departments and in various business units developing new products, working on digital initiatives and in analytics, among other areas.

Companies are aggressively hiring technology professionals, architects, program analysts, software engineers and others, but they are workers not under the CIO's budget, said Foote.

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