October 2016 U.S. employment update and outlook

U.S. employment situation: September 2013
Release date: October 22, 2013
Muted growth in September,
but fundamentals are sound
U.S. employment situation: September 2016 October 7, 2016

September 2016 employment summary
• September was relatively average, but fundamentals are steady
- September saw 156,000 net new jobs created. While relatively average and not up to the consistent 200,000+ seen throughout much of
2014 and 2015, momentum nevertheless remains.
- Monthly additions were brought down due to contraction in government and slowdowns in very large sectors such as education and health
and retail trade. We expect that these are blips and will be revised or self-correcting in upcoming months. On the other hand, PBS
rebounded to healthier levels after a prolonged slowdown with some volatility in recent months.
• Job openings growing faster than employment as a result of talent shortages
- Unemployment rose by 10bp to 5.0 percent in September on the back of rising labor force participation, which also saw a bump to 62.9
percent. At the same time, initial unemployment claims continue to fall, with the moving average resting near a cyclical low of 250,000 per
week.
- In turn, job openings are rising due to broad-based economic growth but a smaller amount of slack in the labor market to absorb the need
for growing headcounts. Job openings have jumped by 3.9 percent over the year even as employment is only up 1.7 percent. For PBS, 5.9-
percent growth in job openings is signaling strong demand by employers, but employment rose by just 2.9 percent as labor force growth
cannot keep up.
• Consumer confidence rising on the back of meaningful wage growth
- Wage growth rose once again to 2.6 percent in September. While typical, the continued low-inflation environment has helped to keep the
cost of goods and to a lesser extent services down, even as inflation has reached the 1-percent mark.
- More meaningful growth in disposable income is powering personal consumption expenditures, which has kept GDP rising in the face of
stagnant business investment as well as bringing consumer confidence to a cyclical high of 104.1 points.
Source: JLL Research, Bureau of Labor Statistics
2

September 2016 U.S. labor market at a glance
+156,000
(72 consecutive months
of growth)
1-month net change
+2,447,000
(+1.7% y-o-y)
12-month change
+782,000
10-year average annual growth
5.0%
Unemployment rate
-10bp
12-month change in unemployment
62.9%
Labor force participation rate
5,871,000
(+3.9% y-o-y)
Job openings
5,227,000
(+3.6% y-o-y)
Hires
2,980,000
(+2.1% y-o-y)
Quits
3

September saw little change from August’s rate of growth, adding
156,000 new jobs; revisions had small impact
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
168,000
233,000
186,000
277,000
24,000
271,000
252,000
167,000
156,000
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

As the workforce grows faster than employment,
unemployment increased by 10bp to 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
Unemploymentrate(%)
1-monthnetchange(thousands)
Monthly employment change Unemployment rate
5

In line with the workforce continuing to grow, job openings
reached a record high of 5.9 million
6
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Jobopenings(thousands)

1.9%
2.8%
3.0%
3.1%
3.6%
3.6%
3.7%
4.5%
4.7%
5.9%
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0%
Mining and logging
Information
Manufacturing
Construction
Other services
Trade, transportation and utilities
Financial activities
Education and health
Leisure and hospitality
Professional and business services
12-month % change in job openings
Across industries, job openings are rising significantly faster
than employment as companies fight for talent
7

0
1,000
2,000
3,000
4,000
5,000
6,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Hiresandquits(thousands)
Hires Quits
After slowing earlier in the year, both hires and quits rose,
indicating that the labor market remains healthy

Even as inflation rebounds slightly, wage growth continues to
outperform, providing increases in disposable income
Source: JLL Research, Bureau of Labor Statistics – CPI data as of March 2016
9
-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

1.8%
1.8%
1.8%
2.2%
2.5%
2.5%
3.0%
3.4%
4.2%
4.8%
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0%
Mining and logging
Education and health
Other services
Trade, transportation and utilities
Manufacturing
Construction
Information
12-month % change in wages
Leisure and hospitality seeing fastest growth in wages, although
its current wage ($15.07) is the lowest among industries
Source: JLL Research, Bureau of Labor Statistics – office-using sectors in red
10

-13.0
-11.0
-11.0
-9.0
-3.1
-2.0
0.0
0.4
1.0
6.0
9.7
15.0
15.0
21.8
22.0
23.0
23.2
29.0
67.0
-20 -10 0 10 20 30 40 50 60 70 80
Manufacturing
Durable goods
Government
Transportation and warehousing
Motor vehicles and parts
Nondurable goods
Mining and logging
Utilities
Information
Wholesale trade
Other services
Health care and social assistance
Retail trade
Construction
Temporary help services
Education and health services
1-month net change (thousands)
Contraction in government and rate of growth in education and
health halved partially responsible for slower gains in September
11

-109.0
-92.0
-47.0
3.0
4.0
8.0
8.6
45.0
54.4
60.1
90.0
145.0
166.0
218.0
316.6
366.0
536.0
582.0
608.0
-200 0 200 400 600 800
Mining and logging
Durable goods
Manufacturing
Motor vehicles and parts
Utilities
Information
Transportation and warehousing
Nondurable goods
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)
608.0
582.0
366.0
316.6
166.0
408.4
Education and health PBS
Leisure and hospitality Retail trade
Financial activities Manufacturing
All other jobs
Over the course of 2016, annual levels of growth have yet to
budge and composition remains consistent
12
Core subsectors added 83.3 percent
of all jobs over the past 12 months.

0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
Unemploymentrateforbachelor’sdegreeholders(%)
Even with an uptick in participation, bachelor’s degree
unemployment fell back to cyclical low of 2.5 percent
13

Although PBS had a strong showing in September, minimal
growth in finance and information pulled down gains
-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
14

Tech steady at 4.5 percent as industry cools due to talent
shortage and lack of slack in the market
-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 August 2016
15
12-month%change(jobs)

Once again, the initial claims moving average fell to near
250,000, indicating that the market is absorbing new entrants
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
Claims
Initial claims 4-week moving average

0
20
40
60
80
100
120
140
ConsumerconfidenceIndex
Consumer confidence reached a recovery high of 104.1 points
in September due to low inflation and sustained job creation
Source: JLL Research, Conference Board
17

Ongoing tech correction has resulted in Silicon Valley falling into
the mid-3%s for annual growth
18
Fort
Lauderdale
4.4%
Orlando
4.4%Dallas
4.2%
Seattle-
Bellevue
3.7%
Nashville
3.6%
Silicon
Valley
3.6%

Total unemployment has yet to budge from 9.7 percent; it will
likely remain there at its cyclical low
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
Totalunemployment(%)
Total unemployment U-6 10-year average
19

The labor force grew by 0.3 percent in September and is up
1.9 percent year-over-year, bringing up the participation rate
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(%)

©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.
For more information, please contact:
Ben Breslau
Managing Director - Americas Research
Benjamin.Breslau@am.jll.com
Ryan Severino
Chief Economist - Americas Research
Ryan.Severino@am.jll.com
Phil Ryan
Senior 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.

October 2016 U.S. employment update and outlook

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