labor market update 2016

LABOR MARKET UPDATE

PREPARED BY:

GLOBAL MARKET INSIGHTS

APRIL, 2016

WORLD EMPLOYMENT & SOCIAL OUTLOOK

• The global economy is showing new signs of weakness pushing unemployment to over 197 million in 2015 and making existing jobs increasingly vulnerable

• The outlook is for unemployment to increase by a further 3.4 million over the next two years and for slower progress in reducing vulnerable employment, which could reach 1.5 billion by 2016 leading to a pause in the expansion of the middle class and, in some cases, intensified risk of social unrest stalling efforts to further reduce working poverty and complicating the tasks of increasing growth and meeting demographic challenges

• Policy focus on quantity and quality of jobs and tackling income inequality is paramount

2

2016 TRENDS

Source: International Labour Office, ILO.org, “World Employment and Social Outlook – Trends 2016”

WORLD ECONOMIC OUTLOOK - UPDATE

• Global growth, currently estimated at 3.1 percent in 2015, is projected at 3.4 percent in 2016 and 3.6 percent in 2017

3

SUBDUED DEMAND, DIMINISHED PROSPECTS

Source: International Monetary Fund, imf.org, “World Economic Outlook – Update”, January 2016

3.43.1

3.43.6

2.4 2.5 2.6 2.62.9

2.2 2.2 2.2

0.2

1.11.3

1.51.6 1.51.7 1.7

-0.4

0.8

1.3 1.2

2014 2015 2016 2017

World Economic Outlook Projections, % YoY

World Output United States United Kingdom France Germany Italy

2016 ECONOMIC FORECASTS

2015GDP Estimate

2016GDP Forecast

2015Unemployment

Rate Estimate

2016 Unemployment

Rate Forecast

US +2.6% +2.8% 5.3% 4.9%

UK +2.5% +2.2% 5.6% 5.5%

FR +1.2% +1.5% 10.2% 9.9%

DE +1.5% +1.6% 4.7% 4.7%

IT +0.8% +1.3% 12.2% 11.9%

NL +1.8% +1.9% 7.2% 7.0%

4

Source: International Monetary Fund, imf.org, “World Economic Outlook Database”, October 2015

LABOR SHORTAGE AND SURPLUS PROJECTIONS

5

By 2030, most countries will face labor shortages including those with slight surpluses of between 0 and 5 percent; representing natural unemployment, in which job openings are already difficult to fill

Source: The Boston Consulting Group

UNITED STATES LABOR MARKET

UPDATE

US LABOR MARKET UPDATE

• U.S. adds 215,000 new jobs in March as more workers enter the labor force

• The unemployment rate rose a notch to 5% from 4.9% because more Americans joined the labor force

• The size of the labor force has increased by 2 million people in the past five months

• The influx of new workers and jobseekers pushed the labor force participation rate up to 63% - the highest level in two years

• 4th-quarter GDP raised to 1.4% almost entirely because of higher consumer spending on recreation and transportation

7

CURRENT EMPLOYMENT

SITUATION: MAR 2016

Change from February 2016:

Total non-farm payroll: +215,000

Private-sector payroll: +195,000

• Retail +48K

• Leisure/Hospitality +40K

• Healthcare +37K

• Construction +37K

• Professional/Business Services +33K

• Finance +15K

• Transportation -3K

• Manufacturing -29K

Temporary Help: +4,000

Government: +20,000

UNEMPLOYMENT RATE: 5.0%

8

5.5M AVAILABLEJOBS

159MIN THE U.S. WORKFORCE

8.0M UNEMPLOYED PEOPLE IN THE U.S.

GDP +1.4% IN Q4 2015

LABOR PARTICIPATION

RATE: 63.0%

US JOBS: AT A GLANCE

9

The U.S. unemployment rate was relatively unchanged at 5.0% in March 2016, near the post peak low of 4.9%. The unemployment rate peaked in October 2009 at 10.0% and is now 5.0 percentage points lower.

0%

2%

4%

6%

8%

10%

12%

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16

U.S. UNEMPLOYMENT RATE

-1,000

-800

-600

-400

-200

0

200

400

600

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16

U.S. MONTHLY JOBS GROWTH (IN THOUSANDS)

The U.S. created 215,000 new jobs in March 2016. The U.S. has been creating more than 200,000 jobs a month since 2014.

MAR: 5.0%

MAR: 215K

Source: Bureau of Labor Statistics

NonFarm

U.S. JOBS BY INDUSTRY: MAR 2016

IndustryEmployment(in thousands)

Employment, %

MoM% Change

MoM Net Change

Total nonfarm 143,774K 100% +0.1% +215K

Total private 121,692K 85% +0.2% +195KProfessional and business

services 20,042K 14% +0.2% +33K

Retail trade 15,942K 11% +0.3% +48K

Leisure and hospitality 15,461K 11% +0.3% +40K

Health care 15,420K 11% +0.2% +37K

Manufacturing 12,291K 9% -0.2% -29K

Financial activities 8,227K 6% +0.2% +15K

Construction 6,672K 5% +0.6% +37K

Transportation / warehousing 4,859K 3% -0.1% -3K

All Other Industries 22,778K 16% +0.1% +17K

Government 22,082K 15% +0.1% +20K

10


PRIVATE SECTOR

TOTAL NON-FARM PAYROLL

+586K

GOVERNMENT

+42K

+628K

UNEMPLOYMENT RATE

5.0%

Retail +181K

Leisure/hospitality +119K

Health Care +118K

Construction +75K

Professional +61K

- Temporary -52K

Financial activities +37K

Education +15K

Manufacturing -29K

Transportation -30K

EMPLOYMENT SITUATION2016-YTD


11

U.S. ECONOMY

12

The U.S. labor force increased by 396,000 (+0.2%) from February 2016 to March 2016 and remained higher than the year prior, an increase of 2.4 million (+1.5%) to 159,286,000 persons.

The size of the labor force has increased by 2 million people in the past five months.

The Labor Force (aka Workforce) is the sum of employed and unemployed persons in the U.S.

The U.S. labor force participation improved to 63.0%; the highest level in two years. The participation rate peaked in 2000 at 67.3%. Participation was at a post-peak low of 62.4% in September 2015 and is 4.3 percentage points below the 2000 peak.

The participation rate measures the active portion of the labor force; the number of people who are either employed or are actively looking for work.


-1,500

-1,000

-500

0

500

1,000

'12 '13 '14 '15 '16

U.S. MONTHLY LABOR FORCE GROWTH (IN THOUSANDS)

MAR: +396k

60%

61%

62%

63%

64%

65%

66%

67%

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16

U.S. LABOR FORCE PARTICIPATION RATE

MAR: 63.0%

-2%-1%0%1%2%3%4%5%

$15,200$15,400$15,600$15,800$16,000$16,200$16,400$16,600

4Q

2013

1Q

2014

2Q

2014

3Q

2014

4Q

2014

1Q

2015

2Q

2015

3Q

2015

4Q

2015

% Y

ea

r-o

ve

r-Y

ea

r

Re

al G

DP

(in

bil

lio

ns)

U.S. REAL GDP

Real GDP (2009 Chained Dollars) % YoY

U.S. GDP

13

The U.S. Real GDP was $16,455.1 billion in the fourth quarter of 2015. Real GDP increased at an annual rate of 1.4% (third estimate), down from an increase of 2.0% in the third quarter of 2015.

Real GDP is the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes.

Source: BEA.gov

U.S. JOB OPENINGS

14

There were 5.5 million job openings on the last business day of January 2016, an increase of 260,000 jobs (+4.9%) since December 2015. Job openings rose by 569,000 jobs (+11.4%) since the year prior.

(February 2016 results have not yet been released.)

The number of quits fell to 2.8 million (-284,000) in January 2016. The quits rate fell to 2% from 2.2%.

The quits rate is a proxy for worker confidence as willingness to leave a job usually indicates a better job is on the horizon.

(February 2016 results have not yet been released.)

0

1000

2000

3000

4000

5000

6000

7000

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16

U.S. JOB OPENINGS (IN THOUSANDS)


JAN: 5.54M

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16

U.S. QUIT RATE

JAN: 2.0%

U.S. TEMPORARY HELP EMPLOYMENT

15

-150

-100

-50

0

50

100

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16

U.S. TEMPORARY HELP SERVICES –MONTHLY JOB GROWTH (IN THOUSANDS)There were 2.9 million temporary help jobs in the

U.S. in March 2016. The number of persons employed in U.S. temporary help jobs increased by 4,000 (+0.1%) jobs over the month or rose by 55,000 (+1.9%) from the year prior.

Temporary help services employment has traditionally been viewed as a leading economic indicator to overall employment or the general economy.

The temporary help services industry is the largest component of the staffing industry and is comprised of companies that employ workers to do temporary work on the premises of, and under the supervision of, customers.


MAR: +4k

U.S. BEVERIDGE CURVE

16

Job openings continue to climb, yet unemployment remains higher than pre-recession levels.

In January 2016, the job openings rate was 3.7% and the unemployment rate was 4.9%, which is higher than the job openings rate before the most recent recession for the same unemployment rate.

From 2010 to today, nearly each month’s point moved up and to the left as the job openings rate increased and the unemployment rate decreased.


U.S. ECONOMIC OUTLOOK

17

New projections from October 2015 show GDP growth in the U.S. is forecast to be 2.6% in 2015 and 2.8% in 2016.

The U.S. unemployment rate is projected to be 5.3% in 2015 and 4.9% in 2016; the forecast was updated in October 2015.

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

U.S. GDP GROWTH RATE, %

Actual Forecast

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

U.S. UNEMPLOYMENT RATE, %

Actual Forecast

Source: IMF World Economic Outlook

U.S. SUPPLY AND DEMAND

18

2,000

4,000

6,000

8,000

10,000

12,000

153

154

155

156

157

158

159

160

Mar-

14

May-1

4

Jul-14

Sep-1

4

Nov-1

4

Jan-1

5

Mar-

15

May-1

5

Jul-15

Sep-1

5

Nov-1

5

Jan-1

6

Mar-

16

Jo

bs (

in t

ho

usa

nd

s)

La

bo

r Fo

rce

(in

mil

lio

ns)

U.S. LABOR FORCE VS U.S. TOTAL AVAILABLE JOBS

Labor Force (MM) Total Available Jobs (000s)

2,000

4,000

6,000

8,000

10,000

12,000

134

136

138

140

142

144

146

Mar-

14

May-1

4

Jul-14

Sep-1

4

Nov-1

4

Jan-1

5

Mar-

15

May-1

5

Jul-15

Sep-1

5

Nov-1

5

Jan-1

6

Mar-

16

Jo

bs (

in t

ho

usa

nd

s)

Em

plo

ym

en

t (i

n m

illi

on

s)

U.S. NONFARM PAYROLL VS U.S. TOTAL AVAILABLE JOBS

Employment (MM) Total Available Jobs (000s)

There were 9.2 million advertised online jobs posted in the U.S. in March 2016. The number of advertised jobs increased by 322,000 in March compared to an increase of 396,000 in the U.S. Workforce and a gain of 215,000 in nonfarm employment.

Source: Bureau of Labor Statistics; Wanted Analytics, a CEB Company

U.S. MILLENNIALS, AGED 16 TO 34

19

-400

-200

0

200

400

600

800

'12 '13 '14 '15 '16

U.S. MILLENNIALS – MONTHLY JOBS GROWTH (IN THOUSANDS)

There were 52.6 million millennials employed in the U.S. in March 2016. The number of millennials employed in U.S. jobs increased by 126,000 (+0.2%) jobs over the month or rose by 1.3 million (+2.5%) from the year prior.

The Millennial generation is defined here as those born between 1982 and 2000 and are between the ages of 16 and 34 in 2016.

0%

2%

4%

6%

8%

10%

12%

14%

16%

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16

U.S. MILLENNIALS - UNEMPLOYMENT RATE

The U.S. unemployment rate for Millennials remained at 7.1% in March 2016 at a post peak low. The unemployment rate peaked in April 2010 at 13.9% and is now 6.8 percentage points lower.


MAR: 7.1%

MAR: 126K

UNITED KINGDOM

LABOR MARKET UPDATE

U.K. ECONOMIC OVERVIEW

21

There were 31,331,000 jobs in the U.K. in Q4 2015. The number of persons employed increased by 210,000 jobs (+0.7%) from the prior quarter or gained 520,000 jobs (+1.7%) year-over-year.(Q1 data are not currently available)

The UK harmonised unemployment rate for Q3 2015 was 5.3%, down from 5.9% a year ago. (Q4 data are not currently available)

Source: OECD.StatExtracts

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

28,500

29,000

29,500

30,000

30,500

31,000

31,500

4q2012

1q2013

2q2013

3q2013

4q2013

1q2014

2q2014

3q2014

4q2014

1q2015

2q2015

3q2015

4q2015

UK EMPLOYMENT (000)

Employment YoY

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

3q2012

4q2012

1q2013

2q2013

3q2013

4q2013

1q2014

2q2014

3q2014

4q2014

1q2015

2q2015

3q2015

UK UNEMPLOYMENT RATE, %

U.K. ECONOMIC OUTLOOK

22

Projections updated in October 2015 show GDP growth in the U.K. is forecast to be 2.5% in 2015 and 2.2% in 2016.

The U.K. unemployment rate is projected to be 5.6% in 2015 and 5.5% in 2016.

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

UK GDP GROWTH RATE, % YOY

Actual Forecast

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

UK UNEMPLOYMENT RATE, %

Actual Forecast


FRANCE LABOR MARKET

UPDATE

FRANCE ECONOMIC OVERVIEW

24

There were 26,397,000 jobs in France in Q4 2015. The number of persons employed decreased by 4,000 jobs compared to the prior quarter yet rose by 20,000 jobs compared to the prior year’s quarter. (Q1 data are not currently available)

The France harmonised unemployment rate for Q4 2015 was 10.1%, up from 10.5% a year ago. (Q1 data are not currently available)


-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

25,200

25,400

25,600

25,800

26,000

26,200

26,400

26,600

4q2012

3q2012

4q2012

1q2013

2q2013

3q2013

4q2013

1q2014

2q2014

3q2014

4q2014

1q2015

2q2015

FRANCE EMPLOYMENT (000)

Employment YoY

9.9%

10.0%

10.1%

10.2%

10.3%

10.4%

10.5%

10.6%

4q2012

1q2013

2q2013

3q2013

4q2013

1q2014

2q2014

3q2014

4q2014

1q2015

2q2015

3q2015

4q2015

FRANCE UNEMPLOYMENT RATE, %

FRANCE ECONOMIC OUTLOOK

25

Projections updated in October 2015 show GDP growth in France is forecast to be 1.2% in 2015 and 1.5% in 2016.

The France unemployment rate is projected to be 10.2% in 2015 and 9.9% in 2016.

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

FRANCE GDP GROWTH RATE, % YOY

Actual Forecast

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

FRANCE UNEMPLOYMENT RATE, %

Actual Forecast


GERMANY LABOR MARKET

UPDATE

GERMANY ECONOMIC OVERVIEW

27

There were 40,130,000 jobs in Germany in Q3 2015. The number of persons employed increased by 88,000 jobs quarter-over-quarterand 193,000 year-over-year. (Q4 data are not currently available)

The Germany harmonised unemployment rate for Q4 2015 was 4.4% down from a rate of 4.6% a year ago. (Q1 data are not currently available)


0.0%0.2%0.4%0.6%0.8%1.0%1.2%1.4%1.6%

38,500

39,000

39,500

40,000

40,500

3q2012

4q2012

1q2013

2q2013

3q2013

4q2013

1q2014

2q2014

3q2014

4q2014

1q2015

2q2015

3q2015

GERMANY EMPLOYMENT (000)

Employment YoY

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

4q2012

1q2013

2q2013

3q2013

4q2013

1q2014

2q2014

3q2014

4q2014

1q2015

2q2015

3q2015

4q2015

GERMANY UNEMPLOYMENT RATE, %

GERMANY ECONOMIC OUTLOOK

28

Projections updated in October 2015 show GDP growth in Germany is forecast to be 1.5% in 2015 and 1.6% in 2016.

The Germany unemployment rate is projected to be 4.7% in 2015 and 2016.

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

GERMANY GDP GROWTH RATE, % YOY

Actual Forecast

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

GERMANY UNEMPLOYMENT RATE, %

Actual Forecast


ITALY LABOR MARKET

UPDATE

ITALY ECONOMIC OVERVIEW

30

There were 22,516,000 jobs in Italy in Q4 2015. The number of persons employed remained unchanged quarter-over-quarter and rose 178,000 year-over-year. (Q1 data are not currently available)

The Italy harmonised unemployment rate for Q4 2015 was 11.5%, down from 12.8% a year ago. (Q1 data are not currently available)


-2.5%-2.0%-1.5%-1.0%-0.5%0.0%0.5%1.0%1.5%

21,900

22,000

22,100

22,200

22,300

22,400

22,500

22,600

4q2012

1q2013

2q2013

3q2013

4q2013

1q2014

2q2014

3q2014

4q2014

1q2015

2Q

2015

3q2015

4Q

2015

ITALY EMPLOYMENT (000)

Employment YoY

10.5%

11.0%

11.5%

12.0%

12.5%

13.0%

4q2012

1q2013

2q2013

3q2013

4q2013

1q2014

2q2014

3q2014

4q2014

1q2015

2q2015

3q2015

4q2015

ITALY UNEMPLOYMENT RATE, %

ITALY ECONOMIC OUTLOOK

31

New October 2015 projections show GDP growth in Italy is forecast to turn positive and be 0.8% in 2015 and 1.3% in 2016.

The Italy unemployment rate is projected to be 12.2% in 2015 and 11.9% in 2016.

-6.0%-5.0%-4.0%-3.0%-2.0%-1.0%0.0%1.0%2.0%3.0%

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

ITALY GDP GROWTH RATE, % YOY

Actual Forecast

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

ITALY UNEMPLOYMENT RATE, %

Actual Forecast


NETHERLANDS LABOR MARKET

UPDATE

NETHERLANDS ECONOMIC OVERVIEW

33

There were 8,329,000 jobs in the Netherlands in Q3 2015. The number of persons employed decreased by 2,000 jobs compared to the prior quarter and expanded by 84,000 compared to the prior year’s quarter. (Q4 data are not currently available)

The Netherlands harmonised unemployment rate for Q4 2015 was 6.7% compared to 7.1% a year ago. (Q1 data are not currently available)


-2.0%

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

8,100

8,150

8,200

8,250

8,300

8,350

8,400

3q2012

4q2012

1q2013

2q2013

3q2013

4q2013

1q2014

2q2014

3q2014

4q2014

1q2015

2q2015

3q2015

NETHERLANDS EMPLOYMENT (000)

Employment YoY

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

4q2012

1q2013

2q2013

3q2013

4q2013

1q2014

2q2014

3q2014

4q2014

1q2015

2q2015

3q2015

4q2015

NETHERLANDS UNEMPLOYMENT RATE, %

NETHERLANDS ECONOMIC OUTLOOK

34

New October 2015 projections show GDP growth in the Netherlands is forecast to be 1.8% in 2015 and 1.9% in 2016.

The Netherlands unemployment rate is projected to be 7.2% in 2015 and 7.0% in 2016.

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

NETHERLANDS GDP GROWTH RATE, % YOY

Actual Forecast

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

NETHERLANDS UNEMPLOYMENT RATE, %

Actual Forecast


labor market update 2016

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