february 2016 u.s. employment update and outlook

U.S. employment situation: September 2013

Release date: October 22, 2013

Pullbacks in key industries soften the

labor market’s entry into 2016

U.S. employment situation: January 2016 February 5, 2016

January 2016 employment summary

• 2016 began on a relatively soft note, with only 151,000 net new jobs created during the month. In comparison, the six-month average totals

214,500 new jobs. Revisions throughout 2015 resulted in a net increase of 85,000 jobs, bringing annual employment growth to 2.7 million

jobs. In order to maintain this level of growth, the national labor market will have to add an average of 234,900 new jobs every month for the

remainder of 2016.

• Hourly wage growth remains steady at 2.5 percent as inflation is flat and labor shortages, particularly for educated workers and in many metro

areas, are becoming more apparent. In spite of meaningful wage increases that should be leading to increased disposable income, however,

the personal consumption expenditures component of GDP has fallen in seasonally adjusted annual terms to 1.5 percent compared to the

2015 average of 1.8 percent.

• Unemployment fell to 4.9 percent in January, the first time that it recorded a sub-5.0 percent figure since 2008, while total unemployment

stayed put at 9.9 percent. This occurred even with a 10-basis-point increase in the labor force participation rate to 62.7 percent, the second

consecutive month of improvement for a metric that remains well below its historic norms.

• At the industry level, drastic contraction in temporary help services (-25,200 jobs) pulled professional and business services growth down to

just 9,000 net new jobs, while education and health services registered only 6,000 net new jobs due to pullbacks in the education subsector.

Transportation and warehousing also contracted, while mining and logging remains on a downward trend and the energy, mining and utilities

aggregate is falling by 7.0 percent per year.

• High-performing local markets continue to add jobs at a blistering pace, although their rates of growth have begun to ease somewhat. Silicon

Valley, which recorded job growth exceeding 5.0 percent in annual terms last month, currently rests at 4.4 percent, with tech hubs such as

San Francisco and Portland at 3.7 and 3.8 percent, respectively. At 3.0 and 2.9 percent, Atlanta and Dallas continue to witness the positive

effects of diverse corporate expansion and migration, as rapid employment growth is translating into demand for space, aided by structurally

high vacancy providing increased and more affordable options for tenants.

Source: JLL Research, Bureau of Labor Statistics

January 2016 labor market at a glance

+151,000(64 consecutive months

of growth)1-month net change

+2,665,000(+1.9% y-o-y)

12-month change

+779,00010-year average annual growth


4.9%Unemployment rate

-70bp12-month change in unemployment

7.0%10-year average unemployment

5,431,000(+11.4% y-o-y)

Job openings

5,197,000(+3.4% y-o-y)

Hires

2,831,000(+6.3% y-o-y)

Quits

2016 started off slow with 151,000 new jobs; revisions bring

2015 total to 2.7 million

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

151,

000

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


Continued job creation brought unemployment below 5.0

percent for the first time this cycle; stands at 4.9 percent

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 rose in November to 5.4 million and have

remained steady since mid-2015


6

0

1,000

2,000

3,000

4,000

5,000

6,000

Job

open

ings

(th

ousa

nds)

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

Con

sum

er c

onfid

ence

inde

xAt 98.1 points, the consumer confidence index is up over the

month and once again nearing 100 points


7

Inflation continues to hover near 0 and is down by 0.1 percent

over the year as wages consistently grow by 2.5 percent


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

-25.2

-20.3

-7.0

-7.0

-5.0

-0.3

1.0

3.5

6.0

8.8

9.0

12.0

17.0

18.0

18.0

29.0

44.0

44.0

57.7

-40 -20 0 20 40 60 80

Temporary help services

Transportation and warehousing

Mining and logging

Government

Other services

Utilities

Information

Motor vehicles and parts

Education and health services

Wholesale trade

Professional and business services

Nondurable goods

Durable goods

Financial activities

Construction

Manufacturing

Leisure and hospitality

Health care and social assistance

Retail trade

1-month net change (thousands)

Contractions in temporary help services, transportation and

government dragged down overall growth; retail leads


9

Retail trade


Manufacturing

All other subsectors

Top three

subsectors

responsible for

86.6 percent of

monthly

growth.

-133.0

-13.0

8.5

26.2

28.0

45.0

56.0

58.0

58.1

78.0

82.1

88.4

149.0

264.0

301.1

458.0

614.0

620.0

644.0

-200 0 200 400 600 800

Mining and logging

Durable goods

Utilities

Motor vehicles and parts

Information

Manufacturing

Other services

Nondurable goods

Wholesale trade

Government

Temporary help services

Transportation and warehousing


Construction

Retail trade


Health care and social assistance

Professional and business services

Education and health services

12-month net change (thousands)

Education and health

PBS


Retail trade


Manufacturing

All other jobs

Despite setbacks in January, education and health remains the

leader in annual job creation, followed closely by PBS


10

Core subsectors added 89.9 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 the sixth consecutive month, bachelor’s degree

unemployment remains at natural low of 2.5 percent


11

A 25,200-job contraction in temporary help services pulled

office-using growth down to its lowest level in years

-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


12

Energy has now contracted by 7.0 percent annually, reaching

rates of contraction not seen since the recession

-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

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 December 2015.

13

12-m

onth

% c

hang

e (jo

bs)

The overall slowdown in job creation dropped tech growth to

6.0 percent; still triple the national rateYear-on-year percent employment growth


14

Initial unemployment claims continue to hover around 275,000

per week, although slightly trending upward in early 2016

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

Hire

s an

d qu

its (

thou

sand

s)

Hires Quits

Hires and quits ticked up, slightly, with the highest level of quits

(2.8 million) since the previous cycle


Silicon Valley slows slightly to 4.4 percent; mid-sized Southern

and Western markets continue to display strong growth


17

Silicon Valley

4.4%

San

Francisco

3.7%

Charlotte

3.3%

Nashville

3.2%

Atlanta

3.0%

Salt Lake

City

3.0%

Seattle

3.0%

Portland

3.8%

0.6%

0.8%

1.3%

1.7%

2.1%

2.2%

2.2%

2.2%

2.9%

3.0%

3.0%

3.7%

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

Chicago

Houston

Philadelphia

Boston

New York

Los Angeles

Washington, DC

South Florida

Dallas

Seattle

Atlanta

San Francisco

12-month % change

Most major markets are growing at around 2.2 percent; San

Francisco, Atlanta and Seattle see stand-out performance


18

Despite a 10-basis-point drop in the official unemployment

rate, total unemployment remains steady at 9.9 percent

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

Total unemployment U-6 10-year average


19

The labor force participation rate saw another 10-basis-point

increase in January to 62.7 percent


20

60.0%

61.0%

62.0%

63.0%

64.0%

65.0%

66.0%

67.0%

2008 2009 2010 2011 2012 2013 2014 2015

Labo

r fo

rce

part

icip

atio

n ra

te (

%)

©2015 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.

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Managing Director - Americas Research

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Research Analyst – Office and Economy Research

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february 2016 u.s. employment update and outlook

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