On the eve of President Barack Obama's State of the Union address Wednesday, a speech that's expected to focus on the need for jobs, the nation's largest engineering association is warning that the latest jobs data is "discouraging" for engineering.

The IEEE-USA, which is part of the Institute of Electrical and Electronics Engineers Inc., believes some engineers are pulling out of the field and taking jobs in other areas or leaving the workforce because of the weak economy, based on its most recent analysis of government labor data.

The engineering group argues that engineering employment is a bellwether of national economic vitality. If companies are to create new products and systems, then they will need to hire engineers do the work.

Among electrical engineers, the unemployment rate dropped from 7.3% to 5.2% from the third to fourth quarter. Good news? Not necessarily, because the total pool of employed electrical engineers declined in that same period by 3%, from 331,000 to 321,000.

Gordon Day, past president of IEEE-USA, said in an e-mail response to questions: "In the fourth quarter, there were about 10,000 more electrical and electronics engineers leaving their jobs (layoffs, resignations, retirements, etc.) than there were new hires," he said.

But even though many of those 10,000 were added to the population of unemployed electrical engineers, many others stopped describing themselves as unemployed. Some have found jobs in other fields or retired while "some will have just stopped looking for employment in engineering," he said.

"The unemployment rate is the ratio of the number who describe themselves as unemployed to the number who describe themselves as employed," and to some extent the numerator and denominator can change independently, explained Day.

Similarly, the unemployment rate for software engineers fell slightly from 4.7% to 4.1%, but the total pool of employed software engineers fell from 970,000 to 952,000, nearly a 2% decline.

"It appears that electrical engineers who lost their jobs in early 2009 are taking jobs in other fields or giving up on their job searches," Day said.

The jobs data is not uniformly negative across all IT and engineering occupations. The numbers of employed computer scientist and systems analysts increased from 745,000 to 792,000, with unemployment falling from 7.3% to 5%.

Day said he hopes that the federal 2011 budget proposal, due Monday, "will call for continued growth in funding for technology, especially those investments authorized in the America Competes Act."

"Engineers and other applied technologists create jobs broadly, so it is very important to restore the health of the high-tech workforce," he said. The Competes Act, approved in 2007, includes a broad range of technology-funding and education initiatives.

President Obama is widely expected to give a lot of attention to jobs and unemployment in his State of the Union speech. Analysts and industry groups are predicting improved IT spending and hiring this year, but every report released discussing the economy in recent months underscore these outlooks with caveats and warnings, including the one released Tuesday by CompTIA, an IT industry group.

CompTIA runs a bimonthly survey of more than 300 IT companies on their spending, R&D, staffing and other aspects of the business. It measures the data and reports it as a confidence index on a 100 point scale, and in December this rating jumped 6.3 point to 56.6, meaning more companies are now viewing the economy in the positive range.

In particular, increasing staffing levels and technology spending are trending in the positive direction, although spending on new revenue initiatives and R&D is flat, the group said.

Tim Herbert, CompTIA's vice president of research, said the next bimonthly survey will be released in March, and will be particularly important in telling how well the economy is doing. "We will probably have some additional evidence whether the recovery has truly taken hold," he said.

Although there have been strong earnings reports from companies and shipments of things like PCs pointing in the right direction, Herbert is cautious about his outlook, and doesn't see any quick return to pre-recession employment and spending levels.

As far as employment goes, "the hope will be that employment improves in some way, even if it's only minor improvement," Herbert said.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, send e-mail to pthibodeau@computerworld.com or subscribe to Patrick's RSS feed .