us employment rate data and trends – december 2016

U.S. employment situation: September 2013

Release date: October 22, 2013

A muted December capped off a

slower, more inconsistent 2016

U.S. employment situation: December 2016 January 6, 2017

December 2016 employment summary

• 2016 was slower and more inconsistent than 2015

- Job creation over the course of 2016 totaled nearly 2.2 million jobs, a 21.4-percent lower figure than the more than 2.7 million jobs created

in 2015. Monthly gains averaged 180,000 vs. the 229,000 in 2015, largely as a result of talent shortages in major markets. More notably,

monthly additions were more inconsistent throughout the year, ranging from a high of 252,000 in July to a low of 24,000 in May. As slack in

the labor market continues to decline, this rate of slower growth and general fluctuation is likely to persist.

- On the other hand, unemployment continued to perform well, declining by 30 basis points over the year to 4.7 percent and reaching a

cyclical low of 4.6 percent in November. Declines in unemployment came as a result of a steadily increasing workforce, marginally boosting

participation, and job growth outperforming the rate of expansion in the workforce. Total unemployment declined by more than double the

rate of headline unemployment and now stands at 9.2 percent.

- Industry growth was also inconsistent in December. Notably, the temporary help services component of PBS contracted by 15,500 jobs and

construction fell by 3,000, while retail trade rose by only 6,300. Many critical components of job creation, such as PBS and manufacturing,

also registered greater fluctuations in 2016.

• Wage growth continues to outpace inflation, reaching highest rate of increase this cycle

- Despite the inconsistencies found in terms of job creation, wage growth remained a constant bright spot throughout the year, increasing by

2.9 percent year-over-year in December, its fastest rate since 2009. Hourly earnings rose across a variety of industries, with information,

leisure, manufacturing and construction leading at more than 3.0 percent each. Only education and health saw annual gains below 2.0

percent.

- Earnings also increased above the rate of inflation even as the consumer price index rebounded markedly on the back of increasing energy

prices. Tightening in the labor market will likely keep wage growth above or at the CPI over the short term, although the effects of the

Federal Reserve’s recent interest-rate hike have yet to be fully seen.

Source: JLL Research, Bureau of Labor Statistics

2

December 2016 U.S. labor market at a glance

+156,000(75 consecutive months

of growth)1-month net change

+2,157,000(+1.5% y-o-y)

12-month change

+786,00010-year average annual growth


4.7%Unemployment rate

-30bp12-month change in unemployment

62.7%Labor force participation rate

5,534,000(+2.1% y-o-y)

Job openings

5,099,000(-2.2% y-o-y)

Hires

2,986,000(+6.8% y-o-y)

Quits

3

December’s modest 156,000 new jobs along with upward

November and downward October revision capped a slower 2016

360,

000

226,

000

243,

000

96,0

0011

0,00

088

,000 10

6,00

012

2,00

022

1,00

018

3,00

016

4,00

0 196,

000

360,

000

226,

000

243,

000

96,0

0011

0,00

088

,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 27

4,00

084

,000

166,

000

188,

000 22

5,00

033

0,00

023

6,00

028

6,00

024

9,00

021

3,00

0 250,

000

221,

000

423,

000

329,

000

221,

000 26

5,00

084

,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

24,0

0027

1,00

025

2,00

017

6,00

0 208,

000

135,

000

204,

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-m

onth

net

cha

nge

4


A 10-basis-point increase in participation and steady growth in

the labor market pushed up unemployment to 4.7 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

Une

mpl

oym

ent r

ate

(%)

1-m

onth

net

cha

nge

(tho

usan

ds)

Monthly employment change Unemployment rate


5

Job openings continue to fluctuate around the 5.5 million

mark, but show no sign of falling as of yet


6

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Job

open

ings

(th

ousa

nds)

1.8%

2.6%

2.9%

3.0%

3.0%

3.7%

4.0%

4.2%

4.3%

5.0%

1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5%

Mining and logging

Manufacturing

Other services

Construction

Information

Trade, transportation and utilities

Financial activities

Professional and business services

Leisure and hospitality

Education and health

Job openings rate

Rate of job openings continues to rise, particularly in

education, health, finance and trade


7

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 an

d qu

its (

thou

sand

s)

Hires Quits

Hires and quits are both stable, but saw no significant rise

during the second half of 2016


Wage growth hit a cyclical high of 2.9 percent in December,

once again outpacing growth in inflation


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-m

onth

% c

hang

e

Hourly wage growth CPI growth

1.8%

2.2%

2.4%

2.4%

2.7%

3.0%

3.0%

3.4%

4.4%

4.4%

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%

Education and health

Other services



Mining and logging

Trade, transportation and utilities

Construction

Manufacturing


Information

12-month % change in wages

Below-average wage growth in education, health and PBS

countered by gains in leisure, manufacturing and trade

Source: JLL Research, Bureau of Labor Statistics – office-using sectors in red

10

Annual growth in both the labor force and employment have

slowed, but job growth continues to eclipse new entrants


11

-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

12-m

onth

% c

hang

e

Civilian labor force Total non-farm

Labor force participation remains wobbly, but increased 10bp

in December to 62.7 percent


12

60%

61%

62%

63%

64%

65%

66%

67%

2008 2009 2010 2011 2012 2013 2014 2015 2016

Labo

r fo

rce

part

icip

atio

n ra

te (

%)

-15.5

-8.0

-6.0

-3.0

-2.0

0.2

2.0

2.0

2.9

6.3

12.0

13.0

14.7

15.0

15.0

17.0

24.0

63.3

70.0

-20 -10 0 10 20 30 40 50 60 70 80

Temporary help services

Other services

Information

Construction

Mining and logging

Utilities

Nondurable goods

Wholesale trade

Motor vehicles and parts

Retail trade

Government


Transportation and warehousing

Durable goods


Manufacturing


Health care and social assistance

Education and health services

1-month net change (thousands)

Counter to earlier months, temporary help services and

construction contracted, pulling down net gains

13


-80.0

-53.0

-45.0

-2.0

1.8

8.0

15.9

23.1

51.5

57.0

62.1

102.0

159.0

183.0

256.7

295.0

514.1

522.0

593.0

-200 0 200 400 600 800

Mining and logging

Durable goods

Manufacturing

Information

Utilities

Nondurable goods

Motor vehicles and parts

Temporary help services

Wholesale trade

Other services

Transportation and warehousing

Construction


Government

Retail trade


Health care and social assistance


Education and health services

12-month net change (thousands)

593.0

522.0295.0

256.7

159.0

331.3

Education and health PBS

Leisure and hospitality Retail trade

Financial activities Manufacturing

All other jobs

Contractions in manufacturing and a slowdown in retail trade

reduced diversity of job creation in 2016 compared to 2015


14

Core subsectors added 84.6 percent

of all jobs over the past 12 months.

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Une

mpl

oym

ent r

ate

for

bach

elor

’s d

egre

e ho

lder

s (%

)Although fluctuating, 2016 saw no net change in

unemployment for bachelor’s degree holders at 2.5 percent


15

A drop-off in PBS growth, stability in finance and contraction in

information kept office-using employment minimal in December

-300

-250

-200

-150

-100

-50

0

50

100

150

200

2009 2010 2011 2012 2013 2014 2015 2016

1-m

onth

net

cha

nge

(tho

usan

ds)

Information Professional and business services Financial activities


16

Energy is still posting contraction on an annual basis, but

declines are slowing quickly

-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 September 2016

17

12-m

onth

% c

hang

e (jo

bs)

Initial unemployment claims continue to stay near their 40-year

low; moving average at 256,000 per week

Source: JLL Research, U.S. Department of Labor

18

200,000

250,000

300,000

350,000

400,000

450,000

500,000

550,000

600,000

650,000

700,000

Cla

ims

Initial claims 4-week moving average

0

20

40

60

80

100

120

140

Con

sum

er c

onfid

ence

Inde

xConsumer confidence rose significantly in December to 113.7

points, surpassing 2007’s peak

Source: JLL Research, Conference Board

19

Even though tech is beginning to cool off and normalize to new

growth rates, Seattle and Silicon Valley remain leaders in jobs


20

Silicon

Valley

3.3%

Orlando

4.5%

Denver

3.1%

Dallas

3.3%

Salt Lake

City

3.5%

Seattle-

Bellevue

3.5%

Unlike headline employment, total unemployment dipped

once again to 9.2 percent, a 70bp annual drop

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

Tot

al u

nem

ploy

men

t (%

)

Total unemployment U-6 10-year average


21

©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.

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us employment rate data and trends – december 2016

Economy & Finance