Job market dismal? Here are the bright spots.

Although it added no net new jobs in August, the economy has some sectors that are growing robustly. Technology, health care, and some regional job markets are doing well.

By , Business editor

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    A customer takes a photo of the Apple flagship store on Fifth Ave. in New York City before entering last month. Despite a gloomy job picture overall, the demand for technology workers is up 20 percent by one count. Jobs in management and technical consulting services reached a record high.
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America added no net new jobs in August.

Zero. Nada.

That’s the first time since World War II that the Labor Department has reported neither a net gain or net loss. And it’s the clearest sign yet that the economy is stalling, perhaps even falling into recession. But the economy is not one homogenous mass. It’s an intricate mechanism, made up of hundreds of industrial sectors and regions, some of which are declining while others are rising, even booming.

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“It’s like George [H.W.] Bush: ‘I see a thousand points of light,” says Tom Flannery, managing director of the Pittsburgh office of Boyden, a global executive search firm based in Hawthorne, N.Y. “But typically, they're in specific geographic or sector locations.”

So where are the bright spots in today’s gloomy job market?

Professional and business services are one positive factor. The number of jobs has risen every month since July 2010, and the sector has retraced nearly half of its losses since peak employment in December 2007, when the recession began.

Sectors within that category are rising even faster. Management and technical consulting services reached a record high in August, having added 58,000 jobs – a 6 percent increase – since the recession began.

“The market for technology people is very tight,” says Scot Melland, chief executive officer of Dice Holdings, which runs specialized career websites in the technology, financial services, and health-care industries. Job listings on his technology website were up 20 percent in August from a year ago, with no sign of slowing.

Another bright spot is health care. The sector is up 8 percent since the recession began, having added just over 1 million jobs.

It’s not just sectors that are doing well. Sometimes, it’s entire states or regions. North Dakota has managed to grow throughout the recession, with employment up nearly 33,000 since December 2007. Texas’ diversified economy has ridden the oil boom and sports an unemployment rate of 8.4 percent in July (the latest available), which is better than the national rate of 9.1 percent (in both July and August).

In southwestern Pennsylvania, a huge natural gas shale project is buoying the economies of a four-state region: Pennsylvania, New York, Ohio, and West Virginia. In August, Mr. Flannery’s Pittsburgh office wrapped up its best month in the last three years. The shale project is generating so much demand for steel pipe that a French company is building a new steel plant in Youngstown, Ohio, whose steel industry had withered away since the mid-1980s.

But for every point of light, it seems there are areas of sharp decline. For example: The 1 million in job gains in health care is more than counterbalanced by a decline of nearly 2 million jobs in construction since the recession began.

Local government, usually a rock of stability during downturns, has lost 550,000 jobs during the same period. Nearly half of those losses have been cuts in teachers and other school staff.

The August employment report also shows several sectors slowing down, dimming hopes of strong growth in the next several months, even though companies are sitting on a mountain of cash.

Businesses are operating “in a very ultraconservative fashion,” says Brian Bethune, an economics professor at Amherst College in Amherst, Mass. “They're managing their headcount on a monthly basis in order to make sure they don't get out of line with their earnings projection.”

Until a positive shock along to boost a larger part of the economy, this slow-growth, no-growth scenario could last for some time.

“We've got the very, very weak employment situation, which doesn't help people's confidence,” says Gary Shilling, an economist in Springfield, N.J. and author of "The Age of Deleveraging." “This is just a slow, painful workout.”

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