may 2016 u.s. employment update and outlook

U.S. employment situation: September 2013

Release date: October 22, 2013

After a bounce-back, April’s slow

growth may mark a turning point

U.S. employment situation: April 2016 May 6, 2016

March 2016 employment summary

• Job creation sees marked slowdown, in line with a pause in GDP growth

- After some earlier rebounds, employment growth slowed sharply in April to 160,000 net new jobs, the lowest figure since early 2015. Slow

job growth mirrored underwhelming GDP growth of 0.5 percent in Q1 2016.

- A slight drop in the labor force participation rate as well as slower job creation kept unemployment at 5.0 percent. Similarly, total

unemployment is stable at 9.7 percent.

- Most subsectors saw below-average monthly gains in April, although the office-using sectors countered this trend with 85,000 new jobs.

• Employee turnover and confidence increasing as hires and quits spike

- Although labor-market performance was disappointing in April, employee confidence in particular showed a very different story. A record

5.4 million job openings were recorded (+6.1 percent year-over-year) as companies seek to expand their headcounts to handle new

demand for goods and services.

- Similarly, hires and quits are rising and growing at annual rates far exceeding total non-farm job growth. The level of quits demonstrates

employees’ confidence in the labor market as job openings and hiring activity rise at a steady clip.

• Numerous indicators show signs of faltering

- A number of indicators seem to have plateaued, either at their cyclical highs or lows. Consumer confidence is hovering around the 95-point

mark, while monthly increases and decreases are shrinking.

- Initial unemployment claims are declining, but the rate of decrease is flattening to around 255,000-260,000. In addition, wage growth has

yet to surpass the 2.5-percent mark, although continued low inflation has helped workers in real terms.

Source: JLL Research, Bureau of Labor Statistics

2

April 2016 labor market at a glance

+160,000(67 consecutive months

of growth)1-month net change

+2,692,000(+1.9% y-o-y)

12-month change

+778,00010-year average annual growth


5.0%Unemployment rate

-40bp12-month change in unemployment

62.8%Labor force participation rate

5,445,000(+6.1% y-o-y)

Job openings

5,422,000(+6.5% y-o-y)

Hires

2,950,000(+9.1% y-o-y)

Quits

3

In line with Q1 2016 GDP slowdown, the labor marked added

just 160,000 jobs in April

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

208,

000

160,

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


Slow job growth and downward revisions kept unemployment

steady at 5.0 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 continue to hover around the 5.5-million mark,

indicating a potential plateau


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

xAs with over indicators, consumer confidence shows little sign

of movement, falling slightly to 94.2 points


7

On the other hand, the usually-lagging hourly wage growth

indicator saw a slight upward tick to 2.5 percent, well ahead of

inflation

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

1.5%

2.0%

2.0%

2.3%

2.4%

3.0%

3.0%

3.3%

3.3%

4.1%

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

Other services

Construction

Education and health

Wholesale trade

Professional and business services

Mining and logging

Manufacturing

Information

Leisure and hospitality

Financial activities

12-month % change

With the exception of financial activities, the variance in wage

growth across industries is small


9

-11.0

-8.0

-3.1

-2.0

0.0

0.1

1.0

2.7

4.0

5.0

6.0

6.1

8.6

9.3

20.0

22.0

38.2

54.0

65.0

-20 0 20 40 60 80

Government

Mining and logging

Retail trade

Nondurable goods

Information

Utilities

Construction

Wholesale trade

Manufacturing

Other services

Durable goods

Motor vehicles and parts

Transportation and warehousing

Temporary help services



Health care and social assistance

Education and health services


1-month net change (thousands)

PBS countered below-average gains elsewhere with a strong

65,000 net new jobs added in April

10

PBS

Education and health


All other subsectors

Top three

subsectors

responsible for

88.1 percent of

monthly

growth.


-132.0

-55.0

-19.0

8.8

24.9

35.0

38.0

61.9

65.2

67.3

73.0

106.0

160.0

260.0

337.4

449.0

597.8

611.0

673.0

-200 0 200 400 600 800

Mining and logging

Durable goods

Manufacturing

Utilities

Motor vehicles and parts

Information

Nondurable goods

Transportation and warehousing

Temporary help services

Wholesale trade

Other services

Government


Construction

Retail trade


Health care and social assistance


Education and health services

12-month net change (thousands)

Education and health PBS

Leisure and hospitality Retail trade

Financial activities Manufacturing

All other jobs

Contractions in durable goods employment have pulled

manufacturing into red over the past 12 months


11

Core subsectors added 82.5 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

(%)

Unemployment for bachelor’s degree holders fell to just 2.3

percent, exacerbating existing talent shortage in metro areas


12

The office-using sectors bucked the trend of slow growth with

the best performance in six months: up 85,000 jobs

-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 appears to have reached its cyclical low, while tech

continues slowing to 5.2 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)

Unemployment claims still falling slowly as participation

remains steady

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

Employee confidence in the labor market is strengthening, with

quits approaching late 2015 peak


Month after month, tech and Sun Belt markets continue to

surpass the national rate of job growth by more than 100bp


17

Austin

4.1%

Dallas

3.9%

San

Francisco

4.0%

Nashville

3.7%

Tampa

3.4%

Orlando

4.3%

Fort

Lauderdale

3.4%

Silicon

Valley

3.8%

0.3%

1.6%

1.8%

2.3%

2.6%

2.6%

2.8%

3.0%

3.1%

3.3%

3.9%

4.0%

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

Houston

Boston

Chicago

New York

Philadelphia

South Florida

Washington, DC

Atlanta

Los Angeles

Seattle

Dallas

San Francisco

12-month % change

Growth in Houston has slowed to near zero and may see

annual contraction later in 2016


18

Similar to other indicators, total unemployment declines have

slowed considerably to around 9.7 percent

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

Total unemployment U-6 10-year average


19

Labor force participation dropped back to 62.8 percent after a

hopeful uptick earlier in the year


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 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.

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Managing Director - Americas Research

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Senior Research Analyst – Office and Economy Research

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may 2016 u.s. employment update and outlook

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