December 2015 U.S. employment update and outlook

U.S. employment situation: September 2013

Release date: October 22, 2013

Construction, health, leisure and

education lead November growth

U.S. employment situation: November 2015 December 4, 2015

November 2015 employment summary

• Although slightly less than in October, monthly growth of 211,000 jobs over the course of November represented the second consecutive

month of rebound after a slowdown in mid-2015 that delayed the Federal Reserve’s potential interest rate hike, but which is looking more and

more likely with recent commentary from the Federal Reserve and nearly all targets being met.

• A labor shortage will likely lead to further wage growth in a low-inflation environment (the consumer price index posted a minimal year-over-

year increase of 0.2 percent), boosting spending and, in turn, GDP growth. Hourly wages are up 2.3 percent across the private sector, with

this figure rising to 2.9 percent for professional and business services. In both cases, wage growth is surpassing job creation, another sign that

workers are in the position to benefit from macroeconomic improvement.

• As the active labor force rose by 273,000 people in November, unemployment remained steady at 5.0 despite another uptick in job creation

due to an increasing number of people began looking for work. This had the side-effect of boosting the labor force participation rate to 62.5

percent from its low of 62.4 percent. Over the year, however, the civilian labor force has grown by just 0.5 percent despite a 1.9-percent spike

in total non-farm employment, signaling an impending labor shortage as expansion remains in the cards throughout 2016.

• The continued fluctuation in professional and business services (PBS) resulted in a more even distribution of growth by sector in November,

with construction, education, health, leisure and retail all in front of PBS. On an annual basis, education and health overtook PBS as the

largest contributor to job creation nationally, with a year-on-year increase of 638,000 jobs. Additionally, contractions in information and

temporary help services suppressed office-using gains in November, while mining and logging remains in the red due to low energy prices.

• At the market level, Silicon Valley and San Francisco remain powerhouses, with total non-farm employment up 4.8 and 4.7 percent over the

year, respectively. Similarly, tech hubs such as Portland, Seattle and Austin are posting additions in the mid-3.0 percent range. Secondary

business hubs Salt Lake City and Charlotte registered increases of 3.7 and 3.2 percent as well, respectively. Even in slower-growth

Midwestern and Northeastern markets such as Chicago, Philadelphia, St. Louis and Milwaukee, gains total 0.9 percent or greater. Although

still positive, Houston’s rate of growth has dropped sharply from 3.0-3.5 percent in 2010 through 2012 to 1.2 percent as of November.

Source: JLL Research, Bureau of Labor Statistics

November 2015 labor market at a glance

+211,000(62 consecutive months

of growth)1-month net change

+2,637,000(+1.9% y-o-y)

12-month change

+795,00010-year average annual growth


5.0%

Unemployment rate

-80bp

12-month change in unemployment

7.0%10-year average unemployment

5,526,000(+18.1% y-o-y)

Job openings

5,049,000(-0.2% y-o-y)

Hires

2,720,00(-0.5% y-o-y)

Quits

211,000 new jobs in November demonstrates continued

rebound, as do upward revisions to previous months

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

029

8,00

021

1,00

0

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


Unemployment remains stable at 5.0 percent as the active

labor force slowly grows

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 remaining steady at 5.5 million; still at record

highs


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

xThe labor-market slowdown in mid-2015 pushed down

consumer confidence, but will likely rebound in line with jobs


7

Wage growth continues to hover in the 2.3-2.5 percent range;

CPI still at or below 0.2 percent growth will boost GDP further


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

-12.3

-12.0

-11.0

-6.0

-3.4

-1.0

2.4

2.4

5.0

6.0

9.1

14.0

14.0

27.0

30.7

32.2

39.0

40.0

46.0

-20 -10 0 10 20 30 40 50

Temporary help services

Information

Mining and logging

Durable goods

Motor vehicles and parts

Manufacturing

Transportation and warehousing

Utilities

Nondurable goods

Other services

Wholesale trade

Government

Financial activities

Professional and business services

Retail trade

Health care and social assistance

Leisure and hospitality

Education and health services

Construction

1-month net change (thousands)

Job creation was more evenly distributed in November, with

construction, education, health, leisure and retail all leading


9

Construction

Education and health


All other subsectors

Top three

subsectors

responsible for

67.8 percent of

monthly

growth.

Losses in information and temporarily help services held back

service growth, but construction pushed up goods-producing

-1,000.0

-800.0

-600.0

-400.0

-200.0

0.0

200.0

400.0

600.0

2008 2009 2010 2011 2012 2013 2014 2015

1-m

onth

net

cha

nge

(tho

usan

ds)

Goods-producing Service-providing


10

-123.0

7.0

12.0

29.0

33.2

34.0

36.0

55.0

74.3

75.8

87.8

93.0

141.0

259.0

284.2

438.0

580.7

606.0

638.0

-200 0 200 400 600 800

Mining and logging

Durable goods

Utilities

Nondurable goods

Motor vehicles and parts

Information

Manufacturing

Other services

Temporary help services

Wholesale trade

Transportation and warehousing

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

Education and health surpasses PBS as the largest contributor

to annual growth as of November 2015


11

Core subsectors added 81.3 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

(%)

Bachelor’s degree-holder unemployment remained at 2.5

percent, having reached nearly full employment


12

The loss of 12,300 jobs in temporary help services and 12,000 in

information reduced monthly office-using employment growth

-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


13

Tech recorded another month of 6.0-percent annual growth in

November, while energy is likely to have troughed

-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.

14

12-m

onth

% c

hang

e (jo

bs)

Tech’s growth of 6.0 percent is occurring across geographies as

the industry attempts to mitigate a talent shortageYear-on-year percent employment growth


15

Initial unemployment claims have maintained their downward

trend throughout 2015; moving average stands at 267,750

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

16

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 totaled more than 5.0 million in November, but a more

competitive labor pool may begin to hamper future growth


The Bay Area and mid-sized markets are fueling growth with

3.0+ percent gains year-over-year


18

San

Francisco

4.7%

Seattle

3.3%

Salt Lake

City

3.7%

Silicon

Valley

4.8%

Charlotte

3.2%

Austin

3.2%

Dallas

3.0%

Portland

3.3%

Some East Coast and Midwestern markets are still growing

slower, but have seen a small bump of late

19


Milwaukee

1.1%

Philadelphia

0.9%St. Louis

1.2%

Chicago

0.9%

New Jersey

1.0%

Total unemployment rose by 10bp in November, a sign of

more people actively looking for work

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

Total unemployment U-6 10-year average


20

The participation rate rose by 10 basis points to 62.5 percent,

but a near-record 94.4 million people not in labor force


21

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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Economy & Finance

December 2015 U.S. employment update and outlook