November 2015 U.S. employment update and outlook

U.S. employment situation: September 2013

Release date: October 22, 2013

Labor market back on track, fueling

chances of interest rate hike

U.S. employment situation: October 2015 November 6, 2015

October 2015 employment summary

• After two months of underperformance, the labor market headed back into growth mode with 271,000 net new jobs. This was the highest

monthly total over the course of 2015 and brought the year-to-date job creation total to 2.1 million. Performance at this level could trigger an

interest rate hike by year-end as the economy continues to approach the Federal Reserve’s targets.

- A labor shortage will likely lead to further wage growth in a low-inflation environment (the consumer price index has seen no growth over

the year), boosting spending and, in turn, GDP growth. Hourly wages are up 2.5 percent across the private sector, with this figure rising to

3.0 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.

• The official unemployment rate nationally declined to 5 percent, while white-collar unemployment stayed stable at just 2.5 percent. Total

unemployment fell to 9.8 percent. In September, the civilian labor force contracted by 350,000 and participation declined to 62.4 percent;

combined with relatively sustained growth elsewhere, which helped to push down the unemployment rate.

- With the official unemployment rate set to enter the upper-4s by year-end and skilled employment near “full” levels, gains may begin to slow

as corporates have a smaller latent talent pool to pick from, boosting wages even more and likely increased the rate of quits.

• Office-using industries contributed to 30.3 percent of monthly gains, although in net terms they added 82,000 new jobs as PBS saw a very

strong rebound in October. Organic growth in health, leisure, construction, education and trade all aided the economy’s improved

performance.

• 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 ranging from 3.2 to 4.8 percent. Even in

slower-growth Midwestern and Northeastern markets such as Chicago, Philadelphia, St. Louis and Milwaukee, gains total 0.9 percent or

greater.

Source: JLL Research, Bureau of Labor Statistics

October 2015 labor market at a glance

+271,000(61 consecutive months

of growth)1-month net change

+2,814,000(+2.0 y-o-y)

12-month change

+793,00010-year average annual growth


5.0%Unemployment rate

-70bp12-month change in unemployment

7.0%10-year average unemployment

5,370,000(+11.1% y-o-y)

Job openings

5,078,000(-7.1% y-o-y)

Hires

2,741,000(-0.1% y-o-y)

Quits

271,000 new jobs in October brings monthly additions back

after a slowdown over the past two 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

013

7,00

027

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

1-m

onth

net

cha

nge

4


Unemployment continues to slowly fall due to incremental

gains; down 10 basis points to 5 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 dipped slightly to 5.4 million, but remain near

cyclical highs as companies seek to expand


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 consumer confidence continues to remain hovering around

100; flatlining mirrors temporary slowdown in market


7

Slowly accelerating wage growth combined with near-zero

increase in consumer price index will likely boost GDP


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

-4.0

-3.0

-2.1

-1.0

-0.3

0.0

1.2

3.0

3.0

5.0

9.7

10.0

24.5

31.0

41.0

43.8

56.7

57.0

78.0

-10 0 10 20 30 40 50 60 70 80 90

Mining and logging

Durable goods

Transportation and warehousing

Information

Utilities

Manufacturing

Motor vehicles and parts

Nondurable goods

Government

Financial activities

Wholesale trade

Other services

Temporary help services

Construction

Leisure and hospitality

Retail trade

Health care and social assistance

Education and health services

Professional and business services

1-month net change (thousands)

PBS and retail trade bounced back to contribute 45 percent of

new jobs in October


9

PBS

Education and health

Retail trade

All other subsectors

Top three

subsectors

responsible for

66.0 percent of

monthly

growth.

Strength in the construction sector brought goods-producing

employment growth back into positive territory

-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

-108.0

12.0

35.0

45.0

46.0

46.9

66.0

77.2

80.0

105.0

116.2

122.0

147.0

233.0

313.4

433.0

606.2

623.0

664.0

-200 0 200 400 600 800

Mining and logging

Utilities

Nondurable goods

Durable goods

Information

Motor vehicles and parts

Other services

Wholesale trade

Manufacturing

Government

Temporary help services

Transportation and warehousing


Construction

Retail trade


Health care and social assistance

Education and health services

Professional and business services

12-month net change (thousands)

PBS

Education and health


Retail trade


Manufacturing

All other jobs

The high-growth education and health subsector is

approaching PBS as the largest annual driver of job creation


11

Core subsectors added 80.3 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 (

%)

Bachelor’s degree-holder unemployment is stable at 2.5

percent; talent shortage occurring in many markets


12

Office-using job growth returned to normal in October, but low

unemployment for skilled workers may hamper future 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


13

Tech spends another month growing at 6 percent, while falling

prices and uncertainty continue to lead to energy job losses

-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 July 2015.

14

12-m

onth

% c

hang

e (jo

bs)

Tech’s growth of 6 percent occurring across geographies as the

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


15

Typical weekly claims are now nearing the 250,000 mark, and

are at previous lows

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 are up 7.1 percent year-over-year, 3.4 times the rate of

overall job growth


Tech hubs remain dominant and comprise most markets with

significant employment gains over the past year


18

Silicon

Valley

4.8%

San

Francisco

4.7%

Dallas

3.0%

Seattle

3.3%

Austin

3.2%

Salt Lake

City

3.7%

Charlotte

3.2%

Some East Coast and Midwestern markets are still growing

slower, but have seen a small bump of late

19


Richmond

-0.1%

Philadelphia

0.9%

Chicago

0.9%Milwaukee

1.1%

St. Louis

1.2%

For the first time since the recession, total unemployment’s in

the single digits at 9.8 percent

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

Total unemployment U-6 10-year average


20

The labor force participation rate remained at its low of 62.4

percent in October


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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November 2015 U.S. employment update and outlook