july 2016 u.s. employment update and outlook
TRANSCRIPT
U.S. employment situation: September 2013Release date: October 22, 2013
The labor market bounced back in June, but slack is diminishingU.S. employment situation: June 2016 July 8, 2016
June 2016 employment summary
• Employment growth returns with strength after a very weak May- June saw 287,000 net new jobs added to the U.S. labor market, a return to healthy growth after a weak May that saw gains revised
downward to just 11,000 jobs. This is the highest monthly figure in eight months and will be reassuring to decision makers such as the Federal Reserve.
- A 414,000-person increase in the labor force brought participation to 62.7 percent and pushed up unemployment slightly to 4.9 percent. Still below the 5.0 percent threshold, unemployment is beginning to approach its cyclical low and is already “full” for white-collar workers.
- Job growth was broad-based, although non-office industries such as health, leisure and hospitality, trade and construction continued to lead monthly and annual increases.
• Metro areas have minimal slack, which could hinder further gains in 2016 and 2017- Many metro areas are posting unemployment below 4.0 percent. In particular, San Francisco, Austin, Nashville, Denver, Dallas, Silicon
Valley and Boston all fall below the 3.5 percent mark, while more diversified geographies such as Atlanta, Chicago, Los Angeles, Miami, Philadelphia and Phoenix are in the 4.5 to 5.5 percent range.
- As a result, we have seen and expect further gradual slowdowns in the rate of job growth in hot markets as employers run up against talent shortages. Accelerated job and office occupancy growth is likely in diversified markets before they too reach similar tightness.
• Wage growth is up and benefits from continued low inflation- Annual wage growth rose by 10 basis points to 2.6 percent, led by information and a number of non-office industries. Wage growth has
decoupled from job creation, with the rate of the former rising as the latter flatlines.- Although there is room for growth, wage growth remains meaningful as the Consumer Price Index continues to stall at 1.0 percent,
providing for further purchasing power and consumer expenditures to drive quarterly GDP gains.
Source: JLL Research, Bureau of Labor Statistics
2
June 2016 U.S. labor market at a glance
+287,000(69 consecutive months
of growth)1-month net change
+2,451,000(+1.7% y-o-y)
12-month change
+777,00010-year average annual growth
Source: JLL Research, Bureau of Labor Statistics
4.9%Unemployment rate
-40bp12-month change in unemployment
62.7%Labor force participation rate
5,788,000(+3.7% y-o-y)
Job openings
5,092,000(+0.4% y-o-y)
Hires
2,912,000(+8.6% y-o-y)
Quits
3
After May’s sharp slowdown (and further downward revision), June bolted back with 287,000 net new jobs
360,0
0022
6,000
243,0
0096
,000
110,0
0088
,000
106,0
0012
2,000
221,0
0018
3,000
164,0
00 196,0
0036
0,000
226,0
0024
3,000
96,00
011
0,000
88,00
016
0,000
150,0
0016
1,000
225,0
0020
3,000
214,0
0019
7,000
280,0
0014
1,000
203,0
0019
9,000
201,0
0014
9,000
202,0
0016
4,000
237,0
00 274,0
0084
,000
166,0
00 188,0
00 225,0
0033
0,000
236,0
0028
6,000
249,0
0021
3,000 25
0,000
221,0
0042
3,000
329,0
0022
1,000
265,0
0084
,000
251,0
00 273,0
0022
8,000
277,0
0015
0,000
149,0
0029
5,000
280,0
0026
2,000
168,0
0023
3,000
186,0
0014
4,000
11,00
028
7,000
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-mo
nth ne
t cha
nge
4
Source: JLL Research, Bureau of Labor Statistics
Unemployment rose slightly to 4.9 percent as the labor force expanded by 414,000 and participation rose
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
Unem
ploym
ent ra
te (%
)
1-mo
nth ne
t cha
nge (
thous
ands
)
Monthly employment change Unemployment rate
Source: JLL Research, Bureau of Labor Statistics
5
Even with slowing monthly job growth, openings continue to rise and stand at a record high of 5.8 million
Source: JLL Research, Bureau of Labor Statistics
6
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Job o
penin
gs (t
hous
ands
)
0
20
40
60
80
100
120
140
Cons
umer
confi
denc
e Ind
exConsumer confidence jumped up by nearly six points, but is still flat over the course of the 2016
Source: JLL Research, Conference Board
7
As wages continue to slowly rise on aggregate, they are doing so as inflation barely maintains 1.0 percent growth
Source: JLL Research, Bureau of Labor Statistics – CPI data as of March 2016
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-m
onth
% ch
ange
Hourly wage growth CPI growth
1.4%
1.9%
2.2%
2.4%
2.5%
2.8%
3.4%
3.7%
4.3%
4.8%
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0%
Other services
Education and health
Financial activities
Professional and business services
Trade, transportation and utilities
Construction
Manufacturing
Mining and logging
Leisure and hospitality
Information
12-month % change in wages
Apart from information, non-office sectors of the economy are leading wage growth
Source: JLL Research, Bureau of Labor Statistics – office-using sectors in red
9
-9.4-5.0
-0.10.0
2.93.03.6
11.013.0
14.015.216.0
22.029.9
38.044.0
58.459.059.0
-20 -10 0 10 20 30 40 50 60 70
Transportation and warehousingMining and logging
Motor vehicles and partsConstruction
UtilitiesDurable goods
Wholesale tradeNondurable goods
Other servicesManufacturing
Temporary help servicesFinancial activities
GovernmentRetail trade
Professional and business servicesInformation
Health care and social assistanceLeisure and hospitality
Education and health services
1-month net change (thousands)
Most sectors have returned to growth mode after contractions in May; non-office continues to dominate
10
Source: JLL Research, Bureau of Labor Statistics
-128.0-76.0
-29.08.017.417.5
36.038.447.054.771.0
129.0163.0
217.0312.8
413.0497.0
587.9668.0
-200 0 200 400 600 800
Mining and loggingDurable goodsManufacturing
UtilitiesMotor vehicles and partsTemporary help services
InformationTransportation and warehousing
Nondurable goodsWholesale trade
Other servicesGovernment
Financial activitiesConstructionRetail trade
Leisure and hospitalityProfessional and business services
Health care and social assistanceEducation and health services
12-month net change (thousands)
668.0
497.0413.0
312.8
163.0
397.2
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
Source: JLL Research, Bureau of Labor Statistics
11
Core subsectors added 83.8 percent of all jobs over the past 12 months.
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
Unem
ploym
ent ra
te for
bach
elor’s
degr
ee ho
lders
(%)
A slight bump in the participation rate increased white-collar unemployment to 2.5 percent, but still well below official rate
Source: JLL Research, Bureau of Labor Statistics
12
Returning workers brought information employment back to normal levels, while finance and PBS are steadier
-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
13
After contracting by upwards of 8.1 percent earlier this year, energy is finally stabilizing
-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.
14
12-m
onth
% ch
ange
(jobs
)
Unemployment claims ticked up slightly, but the moving average is stable at 269,000 per week
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
Claim
s
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 2016
Hire
s and
quits
(tho
usan
ds)
Hires Quits
Hires and quits are still at near-cyclical highs, but have moderated
Source: JLL Research, Bureau of Labor Statistics
16
Month after month, tech and Sun Belt markets continue to surpass the national rate of job growth by more than 100bp
Source: JLL Research, Bureau of Labor Statistics
17
Dallas4.6%
Orlando4.2%Austin
3.9%
Silicon Valley3.7%
Phoenix3.6%
Seattle3.6%
0.2%
1.2%
1.3%
2.0%
2.1%
2.3%
2.4%
2.6%
3.0%
3.4%
3.6%
4.6%
0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%
Houston
Boston
Chicago
New York
Philadelphia
Washington, DC
Los Angeles
South Florida
Atlanta
San Francisco
Seattle
Dallas
12-month % change
As talent shortages make hiring more difficult, major market employment growth now mostly below 3.5 percent
Source: JLL Research, Bureau of Labor Statistics
18
Contrary to the official rate, total unemployment dropped by 10bp to 9.6 percent; decreases have slowed and nearing low
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
Total
unem
ploye
mtn (
%)
Total unemployment U-6 10-year average
Source: JLL Research, Bureau of Labor Statistics
19
The 414,000-person expansion of the labor force boosted the participation rate by 10bp to 62.7 percent
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
Labo
r for
ce pa
rticipa
tion r
ate (%
)
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