The last time the labor market for U.S. tech workers ran this hot was January, 2000 – the same month Pets.com splashed out $1.2 million on a Super Bowl ad (the Saint Louis Rams went on to win the game), investors were driving up shares of B2B e-commerce companies (remember Commerce One?), and America Online had just shocked the world with its $165 billion acquisition of Time Warner.
What could go wrong this time around? Try a talent-driven slowdown.
“There is now the very real prospect of tech worker shortages affecting industry growth,” says Tim Herbert, executive vice president for research and market intelligence at CompTIA, the tech trade group that authored the study. “Firms seeking to expand into new areas such as the Internet of Things, robotic process automation or artificial intelligence may be inhibited by a lack of workers with these advanced skills, not to mention shortages in the complementary areas of technology infrastructure and cybersecurity.”
According to CompTIA, the unemployment rate for America’s technology workers hit 1.3 percent in May. It’s come close to touching these lows before, most recently in March, 2018 and again in April 2007, a year before the global financial crisis wreaked havoc on markets. At those moments, the rate reached 1.4 percent.
Software and applications developers paced the field of new U.S. IT hires, which topped 133,000 in May. (To put that into perspective, employers added a net total of 75,000 jobs last month, an indication of just how vital the tech sector has become to the country’s economic fortunes.)
Indicators point to an IT jobs market that will continue to grow at a record-setting pace. This morning, Glassdoor had 8,007 open data analyst jobs listed on its site. On LinkedIn, meanwhile, employers were seeking to fill nearly 220,000 software engineer positions in the U.S.
Economists have long been fretting over the steady month-by-month increase in open job positions, a sign the skills gap is worsening to a point that imperils growth. The U.S. Labor Department this week said vacancies exceeded the ranks of unemployed Americans by 1.63 million, the highest number since—yep—2000. “The biggest threat to job growth is available supply, not demand for labor,” said Ward McCarthy, chief financial U.S. economist at Jefferies, said in a note.
Nowhere can the war on talent be felt more acutely than in the tech sector. On Monday at Fortune’s CEO Initiative, IBM CEO Virginia Rometty said the issue is becoming a matter of international importance. “I believe so much of the division in our country and other countries roots down to this skills issue,” Rometty said.
In the short term, the historically tight labor market will not just drive up salaries for recent computer science grads, but also fuel further M&A activity in tech, analysts note. As they say in Silicon Valley, If you can’t build it, buy it. (Or, in this case, acquire it.) Yesterday, Salesforce bid $15.7 billion for data analytics company Tableau, the most expensive deal it’s ever undertaken. Last week, Google bought Looker, another big-data analytics company, for $2.6 billion.
“All that M&A action could end up having a huge impact on tech professionals who specialize in anything related to end-user analytics,” Nick Kolakowski writes on the popular IT jobs board, Dice.com. “Data analysts and B.I. [business intelligence] specialists, for example, could find themselves targeted by companies that have acquired these new cloud-based tools and need someone to operate them.”
Job opening trends also impact U.S. worker migration patterns, LinkedIn points out in its June 2019 workforce report. Wichita, Kan., lost the most amount of people for cities it tracks. “For every 10,000 LinkedIn members in Wichita, KS, 250 left in the past 12 months,” the company notes. On the other end of the spectrum is the tech mecca, Austin, which appears to be the most attractive city over the past year. Austin recorded 110 new arrivals for every 10,000 LinkedIn members.
More must-read stories from Fortune:
—A red flag to investors: The stock market may be hitting the “triple top”
—The Renault deal is dead, but Fiat Chrysler still needs a partner
—Many economists think the next recession will be before the 2020 election
—The S&P 500 has performed far worse under Trump than Obama
—Listen to our new audio briefing, Fortune 500 Daily
Don’t miss the daily Term Sheet, Fortune‘s newsletter on deals and dealmakers.