U.S. SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, DC  20549

                                   FORM 10-QSB


  [X]  Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
       Act of 1934

       For the quarterly period ended June 30, 2006

  [ ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities
       Exchange Act of 1934

                        Commission File Number 1-05707


                      GENERAL EMPLOYMENT ENTERPRISES, INC.
       (Exact name of small business issuer as specified in its charter)

              Illinois                                      36-6097429
      (State or other jurisdiction of                  (I.R.S. Employer
      incorporation or organization)                 Identification Number)

         One Tower Lane, Suite 2200, Oakbrook Terrace, Illinois 60181
                   (Address of principal executive offices)

                                 (630) 954-0400
                           (Issuer's telephone number)

Check whether the issuer is not required to file reports pursuant to Section
13 or 15(d) of the Exchange Act.  [ ]

Note - Checking the box above will not relieve any registrant required to
file reports pursuant to Section 13 or 15(d) of the Exchange Act from their
obligations under those Sections.

Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the
past 90 days.                                      Yes [X]    No [ ]

Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).                Yes [ ]    No [X]

The number of shares outstanding of the issuer's common stock as of
June 30, 2006 was 5,148,265.

Transitional small business disclosure format:     Yes [ ]    No [X]







                        PART I - FINANCIAL INFORMATION

Item 1, Financial Statements.

GENERAL EMPLOYMENT ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEET

                                                     June 30    September 30
                                                        2006            2005
(In Thousands)                                    (Unaudited)

ASSETS
Current assets:
Cash and cash equivalents                             $5,544          $5,236
Accounts receivable, less allowances
   (Jun. 2006--$359; Sept. 2005--$270)                 2,068           2,028
Other current assets                                     565             468

Total current assets                                   8,177           7,732
Property and equipment, net                              735             632

Total assets                                          $8,912          $8,364


LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accrued compensation                                  $1,796          $1,834
Other current liabilities                                563             680

Total current liabilities                              2,359           2,514

Shareholders' equity:
Preferred stock, authorized -- 100 shares;
   issued and outstanding -- none                         --              --
Common stock, no-par value; authorized --
   20,000 shares; issued and outstanding --
   5,148 shares                                        4,839           4,839
Retained earnings                                      1,714           1,011

Total shareholders' equity                             6,553           5,850

Total liabilities and shareholders' equity            $8,912          $8,364

See notes to consolidated financial statements.

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GENERAL EMPLOYMENT ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF INCOME (Unaudited)

                                          Three Months           Nine Months
                                         Ended June 30         Ended June 30
(In Thousands, Except Per Share)        2006      2005        2006      2005

Net revenues:
Contract services                      $2,566   $3,011     $ 7,889   $ 8,741
Placement services                      2,755    2,308       7,145     6,212

Net revenues                            5,321    5,319      15,034    14,953

Operating expenses:
Cost of contract services               1,848    2,133       5,606     6,193
Selling                                 1,664    1,403       4,354     3,814
General and administrative              1,453    1,548       4,509     4,604

Total operating expenses                4,965    5,084      14,469    14,611

Income from operations                    356      235         565       342
Investment income                          44       24         138        57

Net income                             $  400   $  259     $   703   $   399

Average number of shares:
Basic                                   5,148    5,143       5,148     5,140
Diluted                                 5,313    5,283       5,340     5,361

Net income per share:
Basic                                  $  .08   $  .05     $   .14   $   .08
Diluted                                $  .08   $  .05     $   .13   $   .07

See notes to consolidated financial statements.

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GENERAL EMPLOYMENT ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

                                                                 Nine Months
                                                               Ended June 30
(In Thousands)                                          2006            2005

Operating activities:
Net income                                            $  703          $  399
Depreciation and other noncurrent items                  120             200
Accounts receivable                                      (40)            (88)
Accrued compensation and payroll taxes                   (38)            460
Other current items, net                                (214)           (521)

Net cash provided by operating activities                531             450

Investing activities:
Acquisition of property and equipment                   (223)            (51)

Financing activities:
Exercises of stock options                                --               9

Increase in cash and cash equivalents                    308             408
Cash and cash equivalents at beginning of period       5,236           4,437

Cash and cash equivalents at end of period            $5,544          $4,845

See notes to consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


Basis of Presentation

The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-QSB.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements.  In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation
have been included.  This financial information should be read in
conjunction with the financial statements included in the Company's annual
report on Form 10-KSB for the year ended September 30, 2005.


Income Taxes

There was no provision for income taxes in either year, because of the
availability of operating losses carried forward from prior years.


Commitments

As of June 30, 2006, the Company had contractual obligations to purchase
approximately $620,000 of recruitment advertising through December 2007.



Item 2, Management's Discussion and Analysis of Financial Condition and
Results of Operations.


Overview

The Company provides contract and placement staffing services for business
and industry, specializing in the placement of information technology,
engineering and accounting professionals.  As of June 30, 2006, the Company
operated 20 branch offices located in 10 states.

The Company's business is highly dependent on national employment trends in
general and on the demand for professional staff in particular.  As an
indicator of employment conditions, the national unemployment rate was 4.6%
in June 2006 and 5.0% in June 2005.  The change indicates a trend toward
fuller employment over the last twelve months.

During the nine months ended June 30, 2006, the Company experienced stronger
demand for its placement services, but weaker demand for its contract
services, compared with the same period last year.  These conditions led to
an increase in the number of placements, while billable contract hours
decreased.  Increased emphasis on higher-paid contract positions resulted in
a higher average hourly billing rate for contract services this year.

                                      5


Consolidated net revenues for the nine months ended June 30, 2006 were up 1%
compared with the prior year.  Contract service revenues were down 10%,
while placement service revenues were up 15%.  As a result of the change in
mix of revenues, the Company achieved a 76% increase in consolidated net
income, which was $703,000 this year compared with $399,000 the prior year.

Because long-term contracts are not a significant part of the Company's
business, future results cannot be reliably predicted by considering past
trends or by extrapolating past results.  While it is difficult to
accurately predict future hiring patterns or the demand for staffing
services, management believes the Company is well positioned for growth of
its operations.  Existing branch offices have the capacity to accommodate
additional consulting staff and a higher volume of business.

The Company had net cash flow of $308,000 for the nine-month period, and the
balance of cash and cash equivalents increased to $5,544,000 as of
June 30, 2006.


Results of Operations

A summary of operating data, expressed as a percentage of consolidated net
revenues, is presented below.

                                                                 Nine Months
                                                               Ended June 30
                                                              2006      2005
Net revenues:
Contract services                                             52.5%     58.5%
Placement services                                            47.5      41.5

Net revenues                                                 100.0     100.0

Operating expenses:
Cost of contract services                                     37.3      41.4
Selling                                                       29.0      25.5
General and administrative                                    30.0      30.8

Total operating expenses                                      96.2      97.7

Income from operations                                         3.8%      2.3%


Net Revenues
Consolidated net revenues for the nine months ended June 30, 2006 were up
$81,000 (1%) from the prior year.  Contract service revenues decreased
$852,000 (10%) during the period, while placement service revenues increased
$933,000 (15%).

The decrease in contract service revenues was due to a 17% decrease in the
number of billable hours, which was partially offset by an 8% increase in
the average hourly billing rate.  Placement service revenues were up for
the period because of a 14% increase in the number of placements.

                                      6


Operating Expenses
Total operating expenses for the nine months ended June 30, 2006 were down
$142,000 (1%) compared with the prior year.

The cost of contract services was down $587,000 (9%), as a result of the
lower volume of contract business.  The gross profit margin on contract
business was 28.9% for the period, which was slightly lower than 29.1% for
the prior year.  There are no direct costs associated with placement
service revenues.

Selling expenses increased $540,000 (14%) for the period, due to higher
commission expense resulting from the higher placement service revenues.
Selling expenses represented 29.0% of consolidated net revenues, which was
up 3.5 points from the prior year because of the change in revenue mix.

General and administrative expenses decreased $95,000 (2%) for the
nine months ended June 30, 2006.  Compensation in the operating divisions
decreased 9% for the period, due to lower advances resulting from the higher
commission expense, and all other general and administrative expenses were
up 1%.  General and administrative expenses represented 30.0% of
consolidated revenues, about the same as the prior year.

There was no provision for income taxes in either year, because of the
availability of operating losses carried forward from prior years.


Financial Condition

As of June 30, 2006, the Company had cash and cash equivalents of $5,544,000,
which was an increase of $308,000 from September 30, 2005.  Net working
capital at June 30, 2006 was $5,818,000, which was an increase of $600,000
from September 30, 2005, and the current ratio was 3.5 to 1.  The Company
had no long-term debt.  Shareholders' equity as of June 30, 2006 was
$6,553,000, which represented 74% of total assets.

During the nine months ended June 30, 2006, the net cash provided by
operating activities was $531,000.  Net income for the period, together
with depreciation and other non-cash charges, provided $823,000, while
working capital items used $292,000.  Cash used for the acquisition of
property and equipment during the period was $223,000.

During fiscal 2006, the Company initiated a program to upgrade its
operational and administrative computer systems.  Capital expenditures for
the year to date consisted primarily of computer equipment and software
purchased in connection with this program.  As of June 30, 2006, the Company
expected to spend approximately $400,000 through September 2007 for
additional computer equipment and related costs to complete this program.

The Company's primary source of liquidity is from its operating activities.
The Company's philosophy regarding the maintenance of cash balances reflects
management's views on potential future needs for liquidity.  Management
believes that funds generated by operations, together with existing cash
balances, will be adequate to finance current operations and capital
expenditures for the foreseeable future.

                                      7

Off-Balance Sheet Arrangements

As of June 30, 2006, and during the nine months then ended, there were no
transactions, agreements or other contractual arrangements to which an
unconsolidated entity was a party, under which the Company (a) had any
direct or contingent obligation under a guarantee contract, derivative
instrument or variable interest in the unconsolidated entity, or
(b) had a retained or contingent interest in assets transferred to the
unconsolidated entity.


Forward-Looking Statements

As a matter of policy, the Company does not provide forecasts of future
financial performance.  However, the Company and its representatives may
from time to time make written or verbal forward-looking statements,
including statements contained in press announcements, reports to
shareholders and filings with the Securities and Exchange Commission.
All statements which address expectations about future operating
performance and cash flows, future events and business developments, and
future economic conditions are forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995.  These statements
are based on management's then-current expectations and assumptions.  Actual
outcomes could differ significantly.  The Company and its representatives
do not assume any obligation to provide updated information.

Some of the factors that could affect the Company's future performance
include, but are not limited to, general business conditions, the demand for
the Company's services, competitive market pressures, the ability of the
Company to attract qualified personnel for regular full-time placement and
contract assignments, the possibility of incurring liability for the
Company's business activities, including the activities of its contract
employees and events affecting its contract employees on client premises, and
the ability to attract and retain qualified corporate and branch management.


Item 3, Controls and Procedures.

As of June 30, 2006, the Company's management evaluated, with the
participation of its principal executive officer and its principal financial
officer, the effectiveness of the Company's disclosure controls and
procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities
Exchange Act of 1934 (the "Exchange Act").  Based on that evaluation, the
Company's principal executive officer and its principal financial officer
concluded that the Company's disclosure controls and procedures were
adequate as of June 30, 2006 to ensure that information required to be
disclosed in reports filed or submitted by the Company under the Exchange
Act is recorded, processed, summarized and reported, within the time periods
specified in the Securities and Exchange Commission's rules and forms.

There was no change in the Company's internal control over financial reporting
that occurred during the Company's most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the
Company's internal control over financial reporting.

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                        PART II - OTHER INFORMATION


Item 6, Exhibits.

The following exhibits are filed as a part of Part I of this report:

No.    Description of Exhibit

31.01  Certification of the principal executive officer required by Rule
       13a-14(a) or Rule 15d-14(a) of the Exchange Act.

31.02  Certification of the principal financial officer required by Rule
       13a-14(a) or Rule 15d-14(a) of the Exchange Act.

32.01  Certifications required by Rule 13a-14(a) or Rule 15d-14(a) of the
       Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United
       States Code.

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                                SIGNATURES


In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.


                                     GENERAL EMPLOYMENT ENTERPRISES, INC.
                                                 (Registrant)


Date:  August 4, 2006                By:  /s/ Kent M. Yauch
                                     Kent M. Yauch
                                     Vice President, Chief Financial Officer
                                     and Treasurer (Principal financial and
                                     accounting officer and duly authorized
                                     officer)

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