november 2017 u.s. employment update and outlook
TRANSCRIPT
National employment situation: October 2017
November 3, 2017
October 2017 U.S. labor market at a glance
2
+261,000(84 consecutive months of growth)
1-month net change
+2,004,000(+1.6% y-o-y)
12-month change
+830,00010-year average annual growth
4.1%Unemployment rate
6,082,000(+10.8% y-o-y)
Job openings
-70bp12-month change in unemployment
62.7%Labor force participation rate
5,430,000(+2.7% y-o-y)
Hires
3,124,000(+2.5% y-o-y)
Quits
Source: JLL Research, Bureau of Labor Statistics
Monthly growth rebounds after a weak, hurricane-affected SeptemberOctober saw 261,000 net new jobs added, a rebound from a weak September hit with two hurricanes and an initially negative employment growth figure.
Revisions brought September back to positive territory, however, extending the expansionary streak to 84 consecutive months of growth. Gains in both monthly
and annual terms were largely similar to previous months, with professional services, education and health and leisure and hospitality being strong performers.
In some sectors, notably information, alternative and emerging subsectors such as other information services are growing quickly, but not enough to counter
losses in more traditional areas.
Despite tight conditions, wage growth continues to struggleAlthough unemployment has fallen to 4.1 percent, wage growth has yet to meaningfully improve, remaining below the 3.0-percent threshold and with most
industries seeing a slowdown the rate of annual earnings growth. Continued tightening in the labor force and the lack of impending boosts to the number of new
workers should result in a degree of increase, but it remains to be seen how much of an uplift in wage growth will occur, which will also challenge forecasting
for consumer spending.
Continued job growth and somewhat improving inflation likely to boost rate hike chance in DecemberThe Federal Reserve did not increase interest rates at its most recent meeting, but is expected to do so in December. Inflation is still volatile and job growth is
less consistent than in previous months, but falling unemployment and strong sentiment from both businesses and consumers should provide enough confidence
for further tightening.
October 2017 U.S. labor market highlights
3Source: JLL Research, Bureau of Labor Statistics
360,0
00
226,0
00
243,0
00
96,0
00
110,0
00
88,0
00
106,0
00
122,0
00
221,0
00
183,0
00
164,0
00 196,0
00
360,0
00
226,0
00
243,0
00
96,0
00
110,0
00
88,0
00
160,0
00
150,0
00
161,0
00
225,0
00
203,0
00
214,0
00
197,0
00
280,0
00
141,0
00
203,0
00
199,0
00
201,0
00
149,0
00
202,0
00
164,0
00
237,0
00 2
74,0
00
84,0
00
166,0
00
188,0
00 2
25,0
00
330,0
00
236,0
00
286,0
00
249,0
00
213,0
00 2
50,0
00
221,0
00
423,0
00
329,0
00
221,0
00
265,0
00
84,0
00
251,0
00
273,0
00
228,0
00
277,0
00
150,0
00
149,0
00
295,0
00
280,0
00
262,0
00
126,0
00
237,0
00
225,0
00
153,0
00
43,0
00
297,0
00
291,0
00
176,0
00
249,0
00
124,0
00
164,0
00
155,0
00
216,0
00
232,0
00
50,0
00
207,0
00
145,0
00
210,0
00
138,0
00
208,0
00
18,0
00
261,0
00
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
1-m
onth
net ch
an
ge
Post-hurricane revisions brought September data back into positive territory, with growth now for 84 months
Source: JLL Research, Bureau of Labor Statistics 4
0%
2%
4%
6%
8%
10%
12%
-1,000
-800
-600
-400
-200
0
200
400
600
Un
em
plo
ym
ent ra
te (
%)
1-m
onth
net ch
an
ge
(th
ou
san
ds)
1-month net change Unemployment rate
261,000 net new jobs in October pushed unemployment to another cyclical low: 4.1 percent
5Source: JLL Research, Bureau of Labor Statistics
2,000
2,500
3,000
3,500
4,000
4,500
5,000
5,500
6,000
6,500
Jo
b o
pe
nin
gs (
thou
san
ds)
Job openings stayed firm at 6.1 million, significantly outpacing the availability of new employees
6Source: JLL Research, Bureau of Labor Statistics
3.1%
3.2%
3.5%
3.8%
3.8%
3.9%
4.1%
4.9%
4.9%
5.0%
0% 1% 2% 3% 4% 5% 6%
Manufacturing
Mining and logging
Construction
Trade, transportation and utilities
Information
Other services
Financial activities
Education and health
Professional and business services
Leisure and hospitality
Job openings rate (%)
Job openings rates across key industries remain in the 3.5%-5.0% range
7Source: JLL Research, Bureau of Labor Statistics
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
12-m
onth
% c
han
ge
Wage growth Inflation
Despite tight labor market conditions, wage growth is still struggling to break 3.0 percent; inflation up
8Source: JLL Research, Bureau of Labor Statistics
1.7%
1.9%
2.0%
2.2%
2.3%
2.7%
2.7%
3.3%
3.8%
4.0%
0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5%
Information
Mining and logging
Trade, transportation and utilities
Manufacturing
Construction
Financial activities
Professional and business services
Other services
Leisure and hospitality
Education and health
12-month wage growth (%)
Countering drop-offs elsewhere, education and health wage growth accelerated in October
9Source: JLL Research, Bureau of Labor Statistics
62%
63%
63%
64%
64%
65%
65%
66%
66%
67%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Lab
or
forc
e p
art
icip
atio
n r
ate
(%
)A 40bp decline in the labor force participation rate was partially responsible for falling unemployment
10Source: JLL Research, Bureau of Labor Statistics
57%
58%
59%
60%
61%
62%
63%
64%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Em
plo
ym
ent-
to-p
op
ula
tion
ra
tio (
%)
The employment-to-population ratio is still moving upwards, but likely not reaching previous high
11Source: JLL Research, Bureau of Labor Statistics
-8.3
-2.0
-1.0
0.0
3.4
5.0
5.0
5.7
8.4
9.0
11.0
12.0
18.3
19.0
24.0
33.5
41.0
50.0
106.0
-20 0 20 40 60 80 100 120
Retail trade
Mining and logging
Information
Utilities
Motor vehicles and parts
Nondurable goods
Financial activities
Wholesale trade
Transportation and warehousing
Government
Construction
Other services
Temporary help services
Durable goods
Manufacturing
Health care and social assistance
Education and health services
Professional and business services
Leisure and hospitality
1-month net change (thousands)
After shedding 104,000 jobs in September, leisure grew by 106,000 in October, regaining all losses
12Source: JLL Research, Bureau of Labor Statistics
-20%
0%
20%
40%
60%
80%
100%
120%
2010 2011 2012 2013 2014 2015 2016 2017
Jo
b g
row
th s
ince 2
01
0 (
%)
Alternative, Internet-based information subsectors are countering declines in traditional media
Source. JLL Research, Bureau of Labor Statistics 13
+99.1%Other information services
Growth since 2010 (%)
-0.8%Information (overall)
-3%
-2%
-1%
0%
1%
2%
3%
2010 2011 2012 2013 2014 2015 2016 2017
12-m
onth
net ch
an
ge
An 8,300-job contraction October has done little to help annual losses for retail trade
Source: JLL Research, Bureau of Labor Statistics 14
-65.4
-64.0
-3.0
3.1
50.0
53.0
58.0
63.0
74.0
106.0
108.1
121.6
153.0
156.0
187.0
284.0
374.4
464.0
536.0
-100 0 100 200 300 400 500 600
Retail trade
Information
Utilities
Motor vehicles and parts
Nondurable goods
Government
Mining and logging
Wholesale trade
Other services
Durable goods
Transportation and warehousing
Temporary help services
Financial activities
Manufacturing
Construction
Leisure and hospitality
Health care and social assistance
Education and health services
Professional and business services
12-month net change (thousands)
Composition of annual gains remains consistent, aided by PBS, health, education, leisure and construction
15Source: JLL Research, Bureau of Labor Statistics
536.0
464.0
284.0
153.0
156.0
411.0
PBS Education and health
Leisure and hospitality Financial activities
Manufacturing Retail trade
All other jobs
Core subsectors added 79.5 percent of all
jobs over the past 12 months.
0%
1%
2%
3%
4%
5%
6%
12-m
onth
% c
han
ge
Bachelor’s degree holders’ unemployment has fallen to 2.0 percent, further hindering corporate expansion
16Source: JLL Research, Bureau of Labor Statistics
-300
-250
-200
-150
-100
-50
0
50
100
150
200
2009 2010 2011 2012 2013 2014 2015 2016 2017
1-m
onth
net ch
an
ge
(th
ou
san
ds)
Professional and business services Financial activities Information
A slowdown in financial activities hampered office-using growth in October; PBS stable
17Source: JLL Research, Bureau of Labor Statistics
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
12-m
onth
% c
han
ge
Tech Energy, mining and utilities Office-using Total non-farm
With job creation sharply slowing in the Bay Area, tech employment growth has dropped to 3.2 percent
18Source: JLL Research, Bureau of Labor Statistics
200,000
250,000
300,000
350,000
400,000
450,000
500,000
550,000
600,000
650,000
700,000
Initia
l u
ne
mp
loym
ent cla
ims p
er
we
ek
Intial weekly claims 4-week moving average
Initial unemployment claims have dropped back to cyclical lows after a hurricane-induced spike
19Source: JLL Research, U.S. Department of Labor
0
20
40
60
80
100
120
140
Co
nsu
me
r co
nfid
en
ce in
de
xA surge in consumer confidence has brought sentiment to its highest point since 2000
20Source: JLL Research, Conference Board
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
12-m
onth
% c
han
ge
Total unemployment 10-year average
Total unemployment dropped to 7.9 percent, its first reading under 8.0 percent this cycle
21Source: JLL Research, Bureau of Labor Statistics