december 2017 u.s. employment update and outlook
TRANSCRIPT
National employment situation: November 2017
December 8, 2017
November 2017 U.S. labor market at a glance
2
+228,000(85 consecutive months of growth)
1-month net change
+2,071,000(+1.4% y-o-y)
12-month change
+838,00010-year average annual growth
4.1%Unemployment rate
6,093,000(+7.5% y-o-y)
Job openings
-60bp12-month change in unemployment
62.7%Labor force participation rate
4,922,000(+2.3% y-o-y)
Hires
3,182,000(+3.4% y-o-y)
Quits
Source: JLL Research, Bureau of Labor Statistics
Even with slow labor-force expansion, hiring continues apaceMonthly employment growth surpassed the 200,000-mark for a second consecutive month in November, adding 228,000 jobs and countering hurricane-related
pauses earlier in the year. Importantly, job growth is still taking place faster than the labor force is capable of expanding and with the participation rate not
increasing, placing pressure on employers in primary, secondary and tertiary markets to expand their headcount. Employment and labor force expansion are
now trending near-exact alignment, resulting in an environment in which job creation will only be able to match the number of new entrants into the workforce.
Retail trade saw a much-needed rebound in November; general trends staying the same over the yearAfter months of contractions resulting in negative annual growth, retail trade added a much-needed 18,700 jobs in November, which helped to bring the sector’s
12-month change to near-positive territory in percentage terms. Structural changes to retail, however, will keep traditionally one of the largest employers away
from being a driver of the labor market. Apart from retail, growth trends have been consistent throughout 2017, spurred by continued activity in professional
services, health, education and emerging, non-traditional segments of information and finance.
Federal Reserve rate hike essentially certain given fundamentalsWith inflation now at 2.0 percent and job growth holding steady, a rate hike from the Federal Reserve. Although wage growth has not grown as expected, labor-
market and other economic indicators are showing broadly confident expectations of the economy heading into 2018.
November 2017 U.S. labor market highlights
3Source: JLL Research, Bureau of Labor Statistics
360,0
00
226,0
00
243,0
00
96,0
00
110,0
00
88,0
00
106,0
00
122,0
00
221,0
00
183,0
00
164,0
00 196,0
00
360,0
00
226,0
00
243,0
00
96,0
00
110,0
00
88,0
00
160,0
00
150,0
00
161,0
00
225,0
00
203,0
00
214,0
00
197,0
00
280,0
00
141,0
00
203,0
00
199,0
00
201,0
00
149,0
00
202,0
00
164,0
00
237,0
00 2
74,0
00
84,0
00
166,0
00
188,0
00 2
25,0
00
330,0
00
236,0
00
286,0
00
249,0
00
213,0
00 2
50,0
00
221,0
00
423,0
00
329,0
00
221,0
00
265,0
00
84,0
00
251,0
00
273,0
00
228,0
00
277,0
00
150,0
00
149,0
00
295,0
00
280,0
00
262,0
00
126,0
00
237,0
00
225,0
00
153,0
00
43,0
00
297,0
00
291,0
00
176,0
00
249,0
00
124,0
00
164,0
00
155,0
00
216,0
00
232,0
00
50,0
00
207,0
00
145,0
00
210,0
00
138,0
00
208,0
00
38,0
00
244,0
00
228,0
00
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
1-m
onth
net ch
an
ge
Job growth surpassed the 200,000 mark for the second consecutive month, even with market tightening
Source: JLL Research, Bureau of Labor Statistics 4
0%
2%
4%
6%
8%
10%
12%
-1,000
-800
-600
-400
-200
0
200
400
600
Un
em
plo
ym
ent ra
te (
%)
1-m
onth
net ch
an
ge
(th
ou
san
ds)
1-month net change Unemployment rate
Slow labor-force expansion and stable participation to keep unemployment near current rate of 4.1%
5Source: JLL Research, Bureau of Labor Statistics
2,000
2,500
3,000
3,500
4,000
4,500
5,000
5,500
6,000
6,500
Jo
b o
pe
nin
gs (
thou
san
ds)
Job openings appear to have stabilized at around 6.0-6.1 million as labor market reaches maximum extent
6Source: JLL Research, Bureau of Labor Statistics
2.8%
3.3%
3.3%
3.3%
3.8%
3.8%
4.6%
4.6%
4.8%
5.4%
0% 1% 2% 3% 4% 5% 6%
Construction
Manufacturing
Mining and logging
Information
Trade, transportation and utilities
Financial activities
Other services
Leisure and hospitality
Education and health
Professional and business services
Job openings rate (%)
Services-based growth keeping PBS jobs opening rate above the 5% mark
7Source: JLL Research, Bureau of Labor Statistics
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
12-m
onth
% c
han
ge
Wage growth Inflation
Wage growth is still barely above inflation even as hiring constraints intensify, up 2.5% over the year
8Source: JLL Research, Bureau of Labor Statistics
1.6%
1.6%
1.9%
2.4%
2.5%
2.7%
2.9%
3.4%
3.4%
3.6%
0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0%
Mining and logging
Trade, transportation and utilities
Manufacturing
Education and health
Professional and business services
Other services
Construction
Information
Financial activities
Leisure and hospitality
12-month wage growth (%)
Wage growth has subdued across the board, still driven largely by knowledge-based sectors
9Source: JLL Research, Bureau of Labor Statistics
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Ch
an
ge
sin
ce J
anu
ary
200
7 (
%)
Civilian labor force Employed
Employment has caught up with labor-force expansion, further highlighting talent shortfalls
10Source: JLL Research, Bureau of Labor Statistics
62%
63%
64%
65%
66%
67%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Lab
or
forc
e p
art
icip
atio
n r
ate
(%
)The labor force participation rate shows no signs of meaningful upward movement; likely to stay flat
11Source: JLL Research, Bureau of Labor Statistics
-4.0
-0.2
1.7
3.4
4.0
7.0
7.0
8.0
9.0
10.5
14.0
18.3
18.7
24.0
27.0
31.0
40.5
46.0
54.0
-10 0 10 20 30 40 50 60
Information
Utilities
Motor vehicles and parts
Wholesale trade
Nondurable goods
Mining and logging
Government
Financial activities
Other services
Transportation and warehousing
Leisure and hospitality
Temporary help services
Retail trade
Construction
Durable goods
Manufacturing
Health care and social assistance
Professional and business services
Education and health services
1-month net change (thousands)
After months of contractions, retail trade demonstrated growth in November
12Source: JLL Research, Bureau of Labor Statistics
-20%
0%
20%
40%
60%
80%
100%
120%
2010 2011 2012 2013 2014 2015 2016 2017
Jo
b g
row
th s
ince 2
01
0 (
%)
Alternative, Internet-based information subsectors are countering declines in traditional media
Source. JLL Research, Bureau of Labor Statistics 13
+99.7%Other information services
Growth since 2010 (%)
-1.3%Information (overall)
-3%
-2%
-1%
0%
1%
2%
3%
2010 2011 2012 2013 2014 2015 2016 2017
12-m
onth
net ch
an
ge
November growth in retail trade helps bring annual sector growth back to near-positive territory
Source: JLL Research, Bureau of Labor Statistics 14
-65.0
-22.7
-3.2
-1.4
47.0
61.3
64.0
66.0
80.0
89.2
116.3
120.0
150.0
184.0
189.0
279.0
388.3
471.0
548.0
-100 0 100 200 300 400 500 600
Information
Retail trade
Utilities
Motor vehicles and parts
Government
Wholesale trade
Mining and logging
Nondurable goods
Other services
Transportation and warehousing
Temporary help services
Durable goods
Financial activities
Construction
Manufacturing
Leisure and hospitality
Health care and social assistance
Education and health services
Professional and business services
12-month net change (thousands)
Annual growth trends show little sign of changing, although manufacturing has gained ground
15Source: JLL Research, Bureau of Labor Statistics
548.0
471.0
279.0
150.0
189.0
434.0
PBS Education and health
Leisure and hospitality Financial activities
Manufacturing Retail trade
All other jobs
Core subsectors added 79.0 percent of all
jobs over the past 12 months.
0%
1%
2%
3%
4%
5%
6%
12-m
onth
% c
han
ge
Bachelor’s degree holders’ unemployment is wobbling around 2.1 percent, remaining essentially full
16Source: JLL Research, Bureau of Labor Statistics
-300
-250
-200
-150
-100
-50
0
50
100
150
200
2009 2010 2011 2012 2013 2014 2015 2016 2017
1-m
onth
net ch
an
ge
(th
ou
san
ds)
Professional and business services Financial activities Information
Throughout 2017, monthly office-using growth has stayed constant at ~52,000 jobs
17Source: JLL Research, Bureau of Labor Statistics
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
12-m
onth
% c
han
ge
Tech Energy, mining and utilities Office-using Total non-farm
Tech employment growth is beginning to stabilize at a new normal of 3.0-3.2% annually
18Source: JLL Research, Bureau of Labor Statistics
200,000
250,000
300,000
350,000
400,000
450,000
500,000
550,000
600,000
650,000
700,000
Initia
l u
ne
mp
loym
ent cla
ims p
er
we
ek
Intial weekly claims 4-week moving average
Initial unemployment claims have recovered from hurricane-related spike and still trending downward
19Source: JLL Research, U.S. Department of Labor
0
20
40
60
80
100
120
140
Co
nsu
me
r co
nfid
en
ce in
de
xConsumer confidence broke yet another record, rising to 126.2 points
20Source: JLL Research, Conference Board
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
140%
Gro
wth
sin
ce J
anu
ary
201
0 (
%)
Gains in consumer confidence this cycle far outpace the increase in consumer spending
21Source: JLL Research, Bureau of Economic Analysis, Conference Board
+129.4%Consumer confidence
Growth since 2010 (%)
+21.2%Personal consumption
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
12-m
onth
% c
han
ge
Total unemployment 10-year average
Total unemployment bumped up slightly by 10bp to 8.0%, but still at similar pre-recession levels
22Source: JLL Research, Bureau of Labor Statistics
