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March 2016 U.S. employment update and outlook

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U.S. employment showed a healthy return to growth in February with 242,000 net new jobs. Unemployment remained at 4.9 percent, but total unemployment dropped to just 9.7 percent—the lowest rate since before the recession.

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March 2016 U.S. employment update and outlook

  1. 1. U.S. employment situation: September 2013 Release date: October 22, 2013 Healthier growth returned in February, but variance remains U.S. employment situation: February 2016 March 4, 2016
  2. 2. February 2016 employment summary • After a slow January, February returned back to normal levels of grow with 242,000 net new jobs. Although year-to-date figures are down compared to 2015, January saw significant upward revisions to 172,000 jobs, improving the year’s initial performance. Despite global tensions and economic shifts, the U.S. economy seems to be holding its own, although certain sectors such as energy and trade could be impacted by fluctuations in domestic and international demand. • Hourly wage growth fell slightly to 2.2 percent, but is still outperforming inflation at 0.0 percent. Over the past two years, wages have increased 3.8 times faster than inflation; while this should be increasing consumer spending, 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 remained steady at 4.9 percent in February, keeping it below 5.0 percent for the second month since before the recession. On the other hand, total unemployment dipped by 20 basis points to 9.7 percent as the number of marginally detached workers continues to decline. • At the industry level, most subsectors witnessed some level of improvement, while mining and logging contracted yet again by 18,000. More volatile was manufacturing, which dropped into negative territory in February as well, along with transportation and warehousing. Professional and business services (PBS), previously the consistent leader in the recovery, is still growing, albeit at a slower rate than education and health, retail trade and leisure and hospitality, in turn bringing down office-using industries’ contributions to monthly gains. • High-performing local markets continue to add jobs at a blistering pace, although their rates of growth have begun to soften as talent shortages and a lack of slack in the labor market make current absolute levels of growth more difficult. Silicon Valley once again led the pack with 4.4-percent growth, while tech hubs such as San Francisco and Portland aren’t far behind 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
  3. 3. February 2016 labor market at a glance +242,000 (65 consecutive months of growth) 1-month net change +2,672,000 (+1.9% y-o-y) 12-month change +779,000 10-year average annual growth Source: JLL Research, Bureau of Labor Statistics 4.9% Unemployment rate -60bp 12-month change in unemployment 7.0% 10-year average unemployment 5,607,000 (+3.8% y-o-y) Job openings 5,361,000 (+2.3% y-o-y) Hires 3,055,000 (+2.1% y-o-y) Quits
  4. 4. 242,000 net new jobs in February brings growth back to normal levels; January revised upwards for YTD gains of 414,000 360,000 226,000 243,000 96,000 110,000 88,000 106,000 122,000 221,000 183,000 164,000 196,000 360,000 226,000 243,000 96,000 110,000 88,000 160,000 150,000 161,000 225,000 203,000 214,000 197,000 280,000 141,000 203,000 199,000 201,000 149,000 202,000 164,000 237,000 274,000 84,000 166,000 188,000 225,000 330,000 236,000 286,000 249,000 213,000 250,000 221,000 423,000 329,000 221,000 265,000 84,000 251,000 273,000 228,000 277,000 150,000 149,000 295,000 280,000 262,000 172,000 242,000 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-monthnetchange 4 Source: JLL Research, Bureau of Labor Statistics
  5. 5. Unemployment remained stable at 4.9 percent as job and labor force growth even each other out 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 Unemploymentrate(%) 1-monthnetchange(thousands) Monthly employment change Unemployment rate Source: JLL Research, Bureau of Labor Statistics 5
  6. 6. At the end of 2015, job openings evened out to a steady rate of roughly 5,300 per month, but have yet to rise further Source: JLL Research, Bureau of Labor Statistics 6 0 1,000 2,000 3,000 4,000 5,000 6,000 Jobopenings(thousands)
  7. 7. 0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 Consumerconfidenceindex Although consumer confidence dropped to 92.2 in February, it has stayed within a similar range for past six months Source: JLL Research, Bureau of Labor Statistics 7
  8. 8. Wage growth still well above CPI growth, but slowing; over past two years, up 4.2 percent vs. 1.1 percent for inflation Source: JLL Research, Bureau of Labor Statistics 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-month%change Hourly wage growth CPI growth
  9. 9. -18.0 -16.0 -12.0 -9.8 -5.3 -4.0 0.7 2.0 2.0 6.0 12.0 12.0 17.0 19.0 23.0 48.0 54.9 57.4 86.0 -40 -20 0 20 40 60 80 100 Mining and logging Manufacturing Durable goods Temporary help services Transportation and warehousing Nondurable goods Wholesale trade Utilities Motor vehicles and parts Financial activities Government Information Other services Construction Professional and business services Leisure and hospitality Retail trade Health care and social assistance Education and health services 1-month net change (thousands) Monthly subsector gains improved in most cases compared to January, but PBS increases remains below previous levels Source: JLL Research, Bureau of Labor Statistics 9 Education and health Retail trade Leisure and hospitality All other subsectors Top three subsectors responsible for 78.1 percent of monthly growth.
  10. 10. -141.0 -34.0 11.2 12.0 27.3 41.0 46.0 51.7 66.0 68.0 75.0 86.0 142.0 253.0 338.6 446.0 610.0 634.5 698.0 -200 0 200 400 600 800 Mining and logging Durable goods Utilities Manufacturing Motor vehicles and parts Information Nondurable goods Wholesale trade Other services Transportation and warehousing Government Temporary help services Financial activities Construction Retail trade Leisure and hospitality Professional and business services 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 Education and health continues to grow its lead, with annual gains approaching 700,000 jobs Source: JLL Research, Bureau of Labor Statistics 10 Core subsectors added 84.1 percent of all jobs over the past 12 months.
  11. 11. 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% Unemploymentrate(%) For the seventh consecutive month, bachelor’s degree unemployment remains at natural low of 2.5 percent Source: JLL Research, Bureau of Labor Statistics 11
  12. 12. Stunted PBS growth pulling down the office-using industries, although information is making a comeback -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 Source: JLL Research, Bureau of Labor Statistics 12
  13. 13. Tech dropped below the 6.0-percent threshold for the first time since 2014 as talent shortage makes sustained growth difficult -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. 13 12-month%change(jobs)
  14. 14. Energy up by 20 basis points to -6.9 percent, but still shedding jobs at an accelerated rate Year-on-year percent employment growth Source: JLL Research, Bureau of Labor Statistics 14
  15. 15. Initial claims are rising slightly, but have yet to break the 285,000 mark 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 Claims Initial claims 4-week moving average
  16. 16. 0 1,000 2,000 3,000 4,000 5,000 6,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 Hiresandquits(thousands) Hires Quits Employee confidence surged at the end of 2015, with quits breaking the 3.0-million mark Source: JLL Research, Bureau of Labor Statistics
  17. 17. Although still above average, leading metro areas seeing slight slowdown in growth as job creation becomes difficult to sustain Source: JLL Research, Bureau of Labor Statistics 17 Silicon Valley 4.4% San Francisco 3.7% Atlanta 3.0% Austin 3.8% Salt Lake City 3.0% Portland 3.8% Seattle 3.0% Charlotte 3.3%
  18. 18. 0.6% 0.8% 1.3% 1.7% 1.7% 2.2% 2.2% 2.2% 2.9% 3.0% 3.0% 4.4% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% Chicago Houston Philadelphia Boston New York Los Angeles Washington, DC South Florida Dallas Seattle Atlanta San Francisco 12-month % change Among key markets, West Coast and Sun Belt continue to lead by a significant margin Source: JLL Research, Bureau of Labor Statistics 18
  19. 19. Total unemployment dipped by 20bp to 9.7 percent as the number of marginally detached workers falls 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% Total unemployment U-6 10-year average Source: JLL Research, Bureau of Labor Statistics 19
  20. 20. The labor force participation rate rose moderately to 62.9 percent, offsetting potential declines in unemployment Source: JLL Research, Bureau of Labor Statistics 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 Laborforceparticipationrate(%)
  21. 21. ©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. For more information, please contact: Ben Breslau Managing Director - Americas Research Benjamin.Breslau@am.jll.com Phil Ryan Research Analyst – Office and Economy Research Phil.Ryan@am.jll.com Or, find more employment, business and real estate research at jll.com. >>> Click here to check it out.

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