Unemployment dips to 5.9 percent in September—its first time below 6.0 percent during the recovery.
The U.S. economy got back on track in September, bouncing back from a sluggish August with 248,000 net new jobs. Growth occurred across sectors and geographies, with office-using industries in particular benefiting from improved corporate confidence leading to permanent hiring.
Total unemployment, which includes discouraged and marginally detached workers, also declined slightly to 11.8 percent, bringing it below the 10-year average.
With numerous other employment metrics all pointing up—including job openings, voluntary quits and CEO confidence—sentiment will only become more optimistic over the coming months.
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U.S. employment update and outlook: October 2014
1. U.S. employment situation: September 2013
Release date: October 22, 2013
Job creation bounces back into
expansion mode in September
U.S. employment situation: September 2014 October 3, 2014
2. September 2014 employment summary
•Total non-farm employment increased by 248,000 jobs in September, bouncing back from a slow August and recording yet another monthly increase of more than 200,000 jobs this year.
-Growth was once again highly diverse and the top three subsectors in terms of additions were responsible for less than two-thirds of new jobs.
-On a year-on-year basis, all subsectors posted net growth for the first time during the recovery.
•Unemployment fell by 20 basis points to 5.9 percent due to a combination of persistent labor force participation declines (down to 62.8 percent in August) and steady employment gains.
-Total unemployment declined to 11.8 percent, the first time during this cycle that it has fallen below the 10-year average.
-Unemployment for college and high-school grads decreased sharply to a mere 2.9 and 5.2 percent, respectively.
3. September 2014 employment summary (con’t)
•After months of relative stagnancy, all three office-using subsectors (PBS, financial activities and information) witnessed a jump in hiring, adding a combined 105,000 jobs during September. Revisions to previous months were also beneficial to all three industries.
•Even with a slight dip in consumer confidence, it remains high at 86.0 points, although still below pre-recession levels. Consumer confidence has risen over the course of the year due to more consistent job growth and falling unemployment in the vast majority of geographies, while it has also spurred improved consumption and spending.
•From a geographic perspective, Texas and the Sunbelt are the definite leaders, with markets consistently reporting 3.5 percent or greater year-on-year employment growth. While most major markets are now in the 2.0+ percent range (with the notable exceptions of Chicago and Philadelphia), they have yet to keep up with Austin, Dallas, Denver, Houston, Raleigh- Durham and South Florida in percentage terms, among other high-growth areas.
5. Another month of gains greater than 200,000 jobs pushed down unemployment to 5.9 percent in September
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
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Unemployment rate (%)
1-month net change (thousands)
Monthly employment change
Unemployment rate
Source: JLL Research, Bureau of Labor Statistics
5
6. Job openings have hit a seven-year high, remaining stable at 4.7 million
Source: JLL Research, Bureau of Labor Statistics
6
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2006
2007
2008
2009
2010
2011
2012
2013
2014
Job openings (thousands)
7. -3.0
-2.1
-0.8
0.0
1.8
1.9
4.0
7.0
9.0
12.0
12.0
12.0
16.0
19.7
22.7
32.0
33.0
35.3
81.0
-40
-20
0
20
40
60
80
100
Nondurable goods
Utilities
Motor vehicles and parts
Other services
Wholesale trade
Transportation and warehousing
Manufacturing
Durable goods
Mining and logging
Information
Financial activities
Government
Construction
Temporary help services
Health care and social assistance
Education and health services
Leisure and hospitality
Retail trade
Professional and business services
1-month net change (thousands)
After months of slow growth, office-using industries surge by 105,000 jobs, but gains remain diverse
Source: JLL Research, Bureau of Labor Statistics
7
PBS
Retail trade
Leisure and hospitality
All other subsectors
Top three subsectors responsible for 60.2 percent of monthly growth.
8. 1.7
10.0
14.0
47.0
47.0
52.0
61.4
89.0
108.9
139.7
147.0
161.0
230.0
232.5
264.4
343.7
372.0
399.0
713.0
0
200
400
600
800
Utilities
Information
Nondurable goods
Government
Other services
Mining and logging
Motor vehicles and parts
Financial activities
Wholesale trade
Transportation and warehousing
Durable goods
Manufacturing
Construction
Temporary help services
Retail trade
Health care and social assistance
Leisure and hospitality
Education and health services
Professional and business services
12-month net change (thousands)
PBS
Education and health
Leisure and hospitality
Retail trade
Manufacturing
Financial activities
All other jobs
For the first time during the recovery, all subsectors demonstrated net growth, with YoY gains totaling 2.6 million
Source: JLL Research, Bureau of Labor Statistics
8
Core subsectors added 75.8 percent of all jobs over the past 12 months.
9. -1,000
-800
-600
-400
-200
0
200
400
2008 2009 2010 2011 2012 2013 2014
Change in '000s jobs
Strength in the private sector provides first 24-month growth of
more than 5.0 million jobs
Private sector hiring up 5.0
million since September 2012
Public sector hiring down 16,000
workers since September 2012
Source: JLL Research, Bureau of Labor Statistics
9
10. 0
2
4
6
8
10
12
Unemployment (%)
Bachelor's degree and higher
High school graduates, no college
Unemployment for both college and high school grads drops sharply, with white-collar unemployment at just 2.9 percent…
2.9%
5.3%
Source: JLL Research, Bureau of Labor Statistics
10
11. …but labor force participation in both segments has remained largely flat and at record lows
Source: JLL Research, Bureau of Labor Statistics
11
54.0%
55.0%
56.0%
57.0%
58.0%
59.0%
60.0%
61.0%
62.0%
63.0%
64.0%
70.0%
71.0%
72.0%
73.0%
74.0%
75.0%
76.0%
77.0%
78.0%
79.0%
80.0%
2007
2008
2009
2010
2011
2012
2013
2014
High school graduate labor force participation rate (%)
College graduate labor force participation rate (%)
Bachelor's degree
High school, no college
12. Both goods-producing and service-providing employment are growing faster, posting notable increases in job creation
-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
1-month net change (thousands)
Goods-producing
Service-providing
Source: JLL Research, Bureau of Labor Statistics
12
13. Improvements in financial activities and information push
office-using gains past energy
-11.0
-9.0
-7.0
-5.0
-3.0
-1.0
1.0
3.0
5.0
7.0
2008 2009 2010 2011 2012 2013 2014
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 August 2014.
13
12-month % change (jobs)
14. Tech still leading but slightly slower in line with national trends, while energy remains up-and-down
Year-on-year percent employment growth
Source: JLL Research, Bureau of Labor Statistics
14
15. Initial unemployment claims continue to fall: 4-week moving average the past three weeks has been below 300,000
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. 0%
2%
4%
6%
8%
10%
12%
0
10
20
30
40
50
60
70
80
90
100
2008
2009
2010
2011
2012
2013
2014
Unemployment rate (%)
Consumer confidence index
Consumer confidence index
Unemployment rate
Although consumer confidence dipped slightly to 86.0 points, it remains high as unemployment continues to fall
Source: JLL Research, Conference Board, Bureau of Labor Statistics
16
17. Quits are slowly rising as worker sentiment about the job market slowly grows
Source: JLL Research, Bureau of Labor Statistics
17
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2006
2007
2008
2009
2010
2011
2012
2013
2014
Quits (thousands)
18. Sunbelt and Texas remain dominant, with Raleigh-Durham year- on-year growth at a whopping 4.7 percent
Source: JLL Research, Bureau of Labor Statistics
18
Raleigh-Durham
4.7%
Houston
4.0%
Dallas
3.9%
Austin 3.8%
Miami
3.5%
San Francisco 3.3%
19. Some East Coast and Midwestern markets are still posting job growth below 1.0 percent year-on-year, however
19
Source: JLL Research, Bureau of Labor Statistics
Hampton Roads 0.5%
Washington, DC
0.6%
Columbus
0.7%
Detroit
0.9%
New Jersey
0.8%
Westchester County
1.0%
20. The labor force participation rate stayed flat a recovery low of 62.8 percent, contributing to the decline in unemployment
Source: JLL Research, Bureau of Labor Statistics
20
61.0%
62.0%
63.0%
64.0%
65.0%
66.0%
67.0%
2008
2009
2010
2011
2012
2013
2014
Labor force participation rate (%)
21. Total unemployment drops below 12.0 percent for the first time during the recovery and is now below average
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
21
22. Solid increases in PBS, financial and information sectors all pushed up office-using industries’ share of monthly growth
Source: JLL Research, Bureau of Labor Statistics
22
23. Office-using job growth posted highest volume since early 2013, while revisions push up previous months
-300
-250
-200
-150
-100
-50
0
50
100
150
2009
2010
2011
2012
2013
2014
Information
Professional and business services
Financial activities
PBS represented 75.0 percent of office jobs lost in February 2010. In July 2014, it represented all 77.1 percent of new office jobs.
Source: JLL Research, Bureau of Labor Statistics
23
24. Temporary help services is still on its way to 3.0 million jobs, but rate of growth slightly slower and more stable
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
3,500.0
-100.0
-80.0
-60.0
-40.0
-20.0
0.0
20.0
40.0
60.0
80.0
2009
2010
2011
2012
2013
2014
Monthly net change in jobs (ths)
Temporary employment monthly net change
Temporary employment
Temporary employment (ths)
Source: JLL Research, Bureau of Labor Statistics
24