january 2016 u.s. employment update and outlook

U.S. employment situation: September 2013

Release date: October 22, 2013

851,000 new jobs over the past three months confirms sustained domestic momentum

U.S. employment situation: December 2015 January 8, 2016

December 2015 employment summary

• 2015 ended on a very high note, with December gaining 292,000 net new jobs and revisions in October and November resulting in a three-

month increase of 851,000 jobs. Overall, the labor market grew by nearly 2.7 million jobs over the course of 2015, down somewhat from the

3.1 million recorded in 2014 due to a moderate pause during the summer.

• With the labor pool at cyclical lows and inflation at 0.0-percent growth over the year due to the continued fall in oil prices, the rise in hourly

earnings by 2.5 percent is significantly more meaningful, which will likely lead to accelerated GDP growth from the end of 2015 and into 2016

as consumer spending elsewhere pushes up the largest component of output: personal consumption expenditures. Among industries,

earnings are increasing fastest in information (+3.8 percent), retail trade (+3.4 percent) and financial activities and construction (+2.9 percent).

• The civilian labor force grew by 466,000 people in December, the highest monthly increase recorded in a year, bringing the participation rate

to 62.6 percent for a second consecutive month of 10-basis-point increase. This jump in people looking for work has resulted in

unemployment remaining unchanged at 5.0 percent (and similarly, total unemployment at 9.9 percent) even as monthly additions maintain

momentum.

• After months of instability and a slowdown, professional and business services (PBS) returned to form in December as well as with revisions

for October, adding 188,000 jobs over the past three months. The diversity of growth characteristic of recent quarters means that this

represented only 22.1 percent of new jobs, however. Information in particular posted a notable pick-up of 16,000 jobs, while financial activities

saw a third consecutive month of double-digit growth.

• Although markets across the country are growing at faster rates, the Bay Area, Texas (excluding Houston) and mid-sized markets in the South

and West continue to be leaders. Silicon Valley’s 12-month change totaled 5.1 percent, the highest of any JLL-tracked market, while Austin,

Charlotte, Fort Lauderdale, Portland, Salt Lake City and Tampa are just some of the secondary and tertiary markets that are outperforming

their peers on a consistent basis. This has been reflected in steady net absorption: these six geographies registered occupancy growth of

more than 5.9 million square feet in 2015, equivalent to 10.8 percent of national net absorption.

Source: JLL Research, Bureau of Labor Statistics

December 2015 labor market at a glance

+292,000(63 consecutive months

of growth)1-month net change

+2,650,000(+1.9% y-o-y)

12-month change

+796,00010-year average annual growth


5.0%Unemployment rate

-60bp12-month change in unemployment

7.0%10-year average unemployment

5,383,000(+11.0% y-o-y)

Job openings

5,137,000(+0.6% y-o-y)

Hires

2,779,000(+1.9% y-o-y)

Quits

2015 ended on a high note, with upward revisions and 292,000

new jobs in December for a 3-month total of 851,000 jobs

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

201,

000

266,

000

119,

000

221,

000 26

0,00

024

5,00

022

3,00

015

3,00

014

5,00

030

7,00

025

2,00

0 292,

000

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

Jan-

11

Mar

-11

May

-11

Jul-1

1

Sep

-11

Nov

-11

Jan-

12

Mar

-12

May

-12

Jul-1

2

Sep

-12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-1

3

Sep

-13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-1

4

Sep

-14

Nov

-14

Jan-

15

Mar

-15

May

-15

Jul-1

5

Sep

-15

Nov

-15

1-m

onth

net

cha

nge

4


A 466,000-person increase in the civilian labor force kept

unemployment at 5.0 percent despite strong job creation

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 continue to hover around 5.4 million, with

construction and leisure posting largest monthly increases


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

xAlthough consumer confidence has been volatile, further

improvements in the labor market are creating upward

momentum


7

As gas prices continue to tumble, hourly wage growth of 2.5

percent has become significantly more meaningful


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

12-m

onth

% c

hang

e

Hourly wage growth CPI growth

-8.0

-6.0

-2.4

1.4

2.4

4.3

8.0

11.0

11.0

14.0

16.0

17.0

23.1

29.0

34.4

45.0

52.6

59.0

73.0

-20 0 20 40 60 80

Mining and logging

Durable goods

Motor vehicles and parts

Utilities

Wholesale trade

Retail trade

Manufacturing

Other services

Financial activities

Nondurable goods

Information

Government

Transportation and warehousing

Leisure and hospitality

Temporary help services

Construction

Health care and social assistance

Education and health services

Professional and business services

1-month net change (thousands)

PBS’ 73,000-job increase in December is a return to form after

a prolonged slowdown earlier in the year


9

PBS

Education and health

Construction

All other subsectors

Top three

subsectors

responsible for

60.6 percent of

monthly

growth.

-131.0

-16.0

11.2

26.9

30.0

46.0

50.0

65.4

68.0

94.2

94.5

99.0

147.0

263.0

274.0

419.0

591.9

605.0

655.0

-200 0 200 400 600 800

Mining and logging

Durable goods

Utilities

Motor vehicles and parts

Manufacturing

Nondurable goods

Information

Wholesale trade

Other services

Transportation and warehousing

Temporary help services

Government


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

Surge in PBS brings annual growth close to education and

health; mining and logging remains the major outlier


10

Core subsectors added 80.4 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

(%)

Another month of 2.5 percent unemployment for bachelor’s

degree holders strengthens notion of talent shortage


11

Office-using growth totaled 792,000 jobs over the course of

2015, or 30 percent of national gains

-300

-250

-200

-150

-100

-50

0

50

100

150

200

2009 2010 2011 2012 2013 2014 2015

Information Professional and business services Financial activities


12

At 5.9 percent, tech continues to grow more than triple the

national average, while energy drops to -6.6 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

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 October 2015.

13

12-m

onth

% c

hang

e (jo

bs)

Tech’s growth, while steady, has spread out geographically due

to a shortage of workers in industry hubs, while energy is at the

opposite spectrum Year-on-year percent employment growth


14

Heading into 2016, initial claims have begun to bottom out at

around 270,000 per week

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

The rates of hires and quits have remained remarkably steady in

late 2015 at 3.6 and 1.9 percent, respectively


Silicon Valley has surpassed the 5.0-percent mark, while mid-

sized Southern and Western powerhouses continue to grow


17

San

Francisco

4.1%

Atlanta

3.4%

Fort

Lauderdale

3.3%

Charlotte

3.3%

Austin

3.9%

Salt Lake

City

3.5%

Silicon Valley

5.1%

Portland

3.5%

0.8%

1.0%

1.2%

1.7%

1.8%

2.0%

2.3%

2.5%

2.9%

3.0%

3.4%

4.1%

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

Houston

Chicago

Philadelphia

Los Angeles

Boston

Washington, DC

South Florida

New York

Seattle

Dallas

Atlanta

San Francisco

12-month % change

Most major markets have exceeded the 2.0-percent threshold,

particularly industry hubs and Sun Belt geographies


18

The increase in people looking for work also kept total

unemployment unchanged 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 rose by 10bp in December to

62.6 percent, but is still well below historic norms


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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january 2016 u.s. employment update and outlook

Economy & Finance