Expected GOP election wins may be one of several reasons for October’s IT hiring gain

Whenever IT hiring picks up, as it did last month, the default explanation from analysts is this: The economy is improving.

That might be true, and it may well explain the report today that showed the U.S., overall, added 214,000 jobs last month.

Of that total employment gain, IT hiring grew by 7,800 jobs in October, compared with a gain of 6,900 jobs in September, according to TechServe Alliance, an IT industry group.

Another IT labor analyst group, Janco Associates, calculated last month’s IT gains at 9,500 jobs.

Government data can be reported in different ways, depending on which job categories are included in the IT job estimates, and it is why analysts report job numbers differently.

Hiring trends are also affected by Labor Department adjustments, and the government’s adjusted data adds nearly 25,000 telecom jobs over the past two months, according to Janco. Because of this adjustment, Janco termed the recent growth in IT over the past several months “explosive,” while TechServe put last month’s results as “modestly stronger.”

There is no one reason for October’s gain. An improving economy may be at the heart of any answer. Independent of the government numbers, Computer Economics, in a recent report on contingent versus full-time hiring, said it is seeing a drop in the use of contract workers at large companies and more reliance on full-time workers, which is a sign of an improving economy.

The election results this week also could have been a factor. Expectation that the Republicans would take the U.S. Senate and pass business-friendly legislation, “had a big thing to do with it,” said Victor Janulaitis, CEO of Janco.

Among the actions Congress might take is to approve repatriation of corporate profits held overseas at a tax discount, and give these companies more money, presumably, to reinvest in the economy. Even the now likely passage of the Keystone pipeline may be helping, Janulaitis said.

“There is rarely a single factor impacting these numbers,” said Mark Roberts, the president of TechServe. Roberts said the sluggish hiring mid-year may have been the result of geopolitical issues, such as the conflict in Ukraine and the rise of ISIS. Domestic issues, including the impending election and macroeconomic issues, such as concerns about an economic slowdown in China and Europe, may have “contributed to a general sense of uncertainty.”

Roberts discounted the role of the election in last month’s employment gain. “I think that would be a difficult conclusion to arrive at. If you look at the financial markets, they only reacted to the GOP win after the fact,” he said.

TechServe’s data showed IT hiring increased by 18,200 jobs in January, up 0.4% from the prior month. That was the high point for the year, while hiring stayed at or close to 0.3% gains month to month. In August and September, IT job growth increased by 0.2% and 0.1% respectively. Last month, it was up .17% from September.

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