august 2016 u.s. employment update and outlook

U.S. employment situation: September 2013

Release date: October 22, 2013

Another month of growth brings year-

to-date totals back to normal

U.S. employment situation: July 2016 August 5, 2016

July 2016 employment summary

• For the second consecutive month, job growth was at healthy levels

- The U.S. economy saw the addition of 255,000 net new jobs in July, the second consecutive month of healthy additions after a volatile first

quarter and next to no growth in May. This was bolstered by upward revisions in the past three months, bringing year-to-date job growth

near 2015 levels.

- Of note in July was PBS’ resurgence, adding 70,000 new jobs over the course of the month and doing so far faster than any other sector.

Throughout late 2015 and late 2016, PBS began to register slower growth compared to health, leisure and retail trade, while the office-

using sectors in general have become more volatile.

• Wages across industries are rising as talent shortages exist in most geographies

- Average weekly wages continue to rise at a clip of 2.6 percent annually, more than double inflation at 1.0 percent. Broken down by

industry, a mix of office-using and non-office sectors (information, leisure, manufacturing, construction and financial activities) have posted

wage growth exceeding 3.0 percent, which will boost disposable income and, in turn, personal consumption that drives GDP.

- Employers are competing for talent more than at any point in the cycle as unemployment sits at 4.9 percent nationally and below 4.0

percent in many major geographies. Separations are also rising as employees become more confident with job prospects: quits are up 6.0

percent year-over-year.

• External shocks are still on the periphery

- Although the global economy continues to suffer from increasing levels of uncertainty and growth forecasts and sentiment have been

reduced due to slowdowns in commodity-rich markets, interest rate cuts in the UK and a broader pause in global trade, the U.S. economy

is largely insulated from these external risks and will therefore see sustained job growth throughout the remainder of the year.

Source: JLL Research, Bureau of Labor Statistics

2

July 2016 U.S. labor market at a glance

+255,000(70 consecutive months

of growth)1-month net change

+2,447,000(+1.7% y-o-y)

12-month change

+779,00010-year average annual growth


4.9%Unemployment rate

-40bp12-month change in unemployment

62.8%Labor force participation rate

5,500,000(+2.7% y-o-y)

Job openings

5,036,000(-0.5% y-o-y)

Hires

2,895,000(+6.0% y-o-y)

Quits

3

A healthy 255,000 new jobs in July combined with upward

revisions are helping 2016 near YTD 2015 job growth

360,

000

226,

000

243,

000

96,0

0011

0,00

088

,000 10

6,00

012

2,00

022

1,00

018

3,00

016

4,00

0 196,

000

360,

000

226,

000

243,

000

96,0

0011

0,00

088

,000

160,

000

150,

000

161,

000

225,

000

203,

000

214,

000

197,

000

280,

000

141,

000

203,

000

199,

000

201,

000

149,

000

202,

000

164,

000

237,

000 27

4,00

084

,000

166,

000

188,

000 22

5,00

033

0,00

023

6,00

028

6,00

024

9,00

021

3,00

0 250,

000

221,

000

423,

000

329,

000

221,

000 26

5,00

084

,000

251,

000

273,

000

228,

000

277,

000

150,

000

149,

000

295,

000

280,

000

262,

000

168,

000

233,

000

186,

000

277,

000

24,0

0029

2,00

025

5,00

0

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2011

2012

2013

2014

2015

2016

1-m

onth

net

cha

nge

4


Unemployment remained stable at 4.9 percent as the labor

force participation rate rose and the workforce expanded

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

-1,000.0

-800.0

-600.0

-400.0

-200.0

0.0

200.0

400.0

600.0

Une

mpl

oym

ent r

ate

(%)

1-m

onth

net

cha

nge

(tho

usan

ds)

Monthly employment change Unemployment rate


5

Job openings dropped slightly in July to 5.5 million, but are

still rising at an annual rate


6

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Job

open

ings

(th

ousa

nds)

0

20

40

60

80

100

120

140

Con

sum

er c

onfid

ence

Inde

xConsumer confidence continues to show no movement at 97.3

points in July

Source: JLL Research, Conference Board

7

With wage and CPI growth at 2.6 and 1.0 percent, respectively,

in recent months, employees are seeing meaningful gains

Source: JLL Research, Bureau of Labor Statistics – CPI data as of March 2016

8

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

2008 2009 2010 2011 2012 2013 2014 2015 2016

12-m

onth

% c

hang

e

Hourly wage growth CPI growth

1.6%

1.9%

2.3%

2.5%

2.6%

3.0%

3.0%

3.0%

4.0%

4.6%

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%

Education and health

Other services

Mining and logging

Trade, transportation and utilities

Professional and business services

Financial activities

Construction

Manufacturing

Leisure and hospitality

Information

12-month % change in wages

Competition for talent in industries is enabling wage growth in

excess of 3.0 percent over the year

Source: JLL Research, Bureau of Labor Statistics – office-using sectors in red

9

-7.0

-2.0

0.0

0.7

1.7

3.0

6.7

9.0

11.0

11.7

14.0

14.7

17.0

18.0

36.0

38.0

45.0

48.8

70.0

-20 -10 0 10 20 30 40 50 60 70 80

Mining and logging

Nondurable goods

Information

Utilities

Wholesale trade

Other services

Motor vehicles and parts

Manufacturing

Durable goods

Transportation and warehousing

Construction

Retail trade

Temporary help services


Education and health services

Government


Health care and social assistance


1-month net change (thousands)

After months of slower-than-average increases, PBS roared

back in July with 70,000 new jobs

10


-130.0

-65.0

-31.0

5.9

26.7

27.0

34.0

38.4

46.1

54.6

60.0

154.0

162.0

215.0

289.3

421.0

550.0

576.8

639.0

-200 0 200 400 600 800

Mining and logging

Durable goods

Manufacturing

Utilities

Motor vehicles and parts

Information

Nondurable goods

Transportation and warehousing

Wholesale trade

Temporary help services

Other services

Government


Construction

Retail trade



Health care and social assistance

Education and health services

12-month net change (thousands)

639.0

550.0

421.0

289.3

162.0

385.7

Education and health PBS

Leisure and hospitality Retail trade

Financial activities Manufacturing

All other jobs

Over the course of 2016, annual levels of growth have yet to

budge and composition remains consistent


11

Core subsectors added 84.2 percent

of all jobs over the past 12 months.

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Une

mpl

oym

ent r

ate

for

bach

elor

’s d

egre

e ho

lder

s (%

)White-collar unemployment shows little sign of going below

what is likely its cyclical low of 2.5 percent


12

Office-using industries continue to show volatility, but are

currently posting strongest growth year-to-date

-300

-250

-200

-150

-100

-50

0

50

100

150

200

2009 2010 2011 2012 2013 2014 2015 2016

Information Professional and business services Financial activities


13

Energy is landing after a sharp downturn throughout 2015, with

year-over-year contractions softening to 7.3 percent

-11.0

-9.0

-7.0

-5.0

-3.0

-1.0

1.0

3.0

5.0

7.0

9.0

2008 2009 2010 2011 2012 2013 2014 2015 2016

High-tech Energy, Mining, and Utilities Office-using industries Total non-farm

Source: JLL Research, Moody’s. Note: Due to data lags, high-tech employment only available through January 2015.

14

12-m

onth

% c

hang

e (jo

bs)

Initial claims remain below the 265,000-barrier mark on a

weekly basis, on par with previous cycle’s low

Source: JLL Research, U.S. Department of Labor

15

200,000

250,000

300,000

350,000

400,000

450,000

500,000

550,000

600,000

650,000

700,000

Cla

ims

Initial claims 4-week moving average

0

1,000

2,000

3,000

4,000

5,000

6,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Hire

s an

d qu

its (

thou

sand

s)

Hires Quits

Although both hires and quits declined subtly in July, neither

did to the same degree as job openings


Month after month, tech and Sun Belt markets continue to

surpass the national rate of job growth by more than 150bp


17

Dallas

3.3%

Austin

4.0%

Silicon Valley

3.9%

Seattle-

Bellevue

3.5%

Phoenix

3.6%

Orlando

4.5%

As with the official unemployment rate, total unemployment is

beginning to reach its trough at 9.7 percent

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

Tot

al u

nem

ploy

men

t (%

)

Total unemployment U-6 10-year average


18

Another month of increase for the labor force (+407,000

people) pushed up the participation rate to 62.8 percent


19

60.0%

61.0%

62.0%

63.0%

64.0%

65.0%

66.0%

67.0%

2008 2009 2010 2011 2012 2013 2014 2015 2016

Labo

r fo

rce

part

icip

atio

n ra

te (

%)

©2016 Jones Lang LaSalle Research IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.

For more information, please contact:

Ben Breslau

Managing Director - Americas Research

[email protected]

Phil Ryan

Senior Research Analyst – Office and Economy Research

[email protected]

Or, find more employment, business and real estate research at jll.com.

>>> Click here to check it out.

mailto:[email protected]

mailto:[email protected]

http://www.us.jll.com/united-states/en-us/research?utm_source=slideshare&utm_medium=social&utm_campaign=august16employment

august 2016 u.s. employment update and outlook

Economy & Finance