IT Unemployment Rate Hits Historic HighIT Unemployment Rate Hits Historic High

The IT unemployment rate in October remained at 5%, matching September's figure. That's the highest IT unemployment rate for those months in more than a decade, according to the U.S. Bureau of Labor Statistics, which compiled statistics at the request of information from three IT-related occupation categories--computer systems analysts and scientists, computer programmers, and computer operators. A year ago, IT unemployment stood at 1.7% in September and 2.6% in October.

The IT labor force last month approached record levels of 2.94 million workers, with 147,000 out of work and looking for jobs in those categories.

When told the jobless rate for IT workers paralleled that of the overall workforce, Scott Brown, the chief economist at brokerage firm Raymond James & Associates in St. Petersburg, Fla., says it makes sense. The economic slowdown isn't like past recessions, such as the one a decade ago when many of the people laid off were midlevel managers. There's a "lean structure to begin with at many of these firms, so cuts are being made across the board," Brown says.

Since the last recession, IT unemployment averaged about 2.5 percentage points below the overall jobless rate. That changed this fall. The September IT unemployment rate surpassed the overall jobless rate by 0.3 percentage points for the first time since the bureau began tracking IT unemployment in 1963. Last month, IT unemployment was 0.4 percentage points lower than the overall rate.

Some economists see a connection between higher IT unemployment and lower IT spending. A decline in technology spending began in mid-2000 as the dot-com bubble began to deflate and the Y2K problem faded. After spending years trying to hire hard-to-find IT talent, many companies this year reluctantly had to to let some of them go.

"When the economic slowdown began, managers thought it would be short-term," Brown says. "There was a little bit of hoarding of skilled labor then. But over time, as things didn't improve, they had to cut cost anywhere they could."