April 2015 U.S. employment update and outlook

U.S. employment situation: September 2013

Release date: October 22, 2013

After months of accelerated job

growth, labor market slows down

U.S. employment situation: March 2015 April 3, 2015

March 2015 employment summary

• After 12 consecutive months of job creation exceeding 200,000 jobs per month, the U.S. economy took a breather in March, but this is likely

temporary rather than permanent, due to low rates of jobless claims and consistent previous growth. Much of this was spurred by a

contraction in goods-producing employment (mining and logging alone posted losses of 11,000 jobs over the month), although most

subsectors registered below-average gains.

• Unemployment stayed stable at 5.5 percent. A 10-basis-point decrease in labor force participation to 62.7 percent was a contributor to

falling unemployment, lowering the number of people looking for work. Similarly, the number of re-entrants and new entrants to the

workforce has fallen consistently, which is lowering unemployment figures. Total unemployment once again declined faster, down 10 basis

points to 10.9 percent.

• Unemployment for high-school and college grads remains near cyclical lows (5.3 and 2.5 percent, respectively), but labor force participation

for both groups is at record lows with little sign of increase. Continued declines in unemployment have kept wage growth stable at 2.6

percent. With these figures set to fall even further over the coming months, wages may rise even faster. Importantly, wages are currently

increasing at a faster pace than the consumer price index due to the ongoing collapse in energy prices.

• Office-using industries contributed 50,000 jobs to March growth, similar to previous months but not on the same upward trajectory as other

high-growth sectors.

- However, as multiple subsectors saw declines in the rate of monthly growth, office-using industries contributed to 39.7 percent of

March’s gains.

• At the market level, Silicon Valley saw 5.3-percent annual job growth, among the highest rates recorded for a JLL-tracked market this cycle.

Additionally, the number of metro areas with employment gains of more than 4.0 percent is at its highest rate during the current cycle.

Notably, Atlanta has joined many of the top-performing Sunbelt cities as a core contributor to metro-area employment growth, with

annualized increases of 4.3 percent.

Source: JLL Research, Bureau of Labor Statistics

After 12 months of job growth greater than 200,000, March saw

a slowdown to 126,000 new jobs 36

0,00

0

226,

000

243,

000

96,0

00

110,

000

88,0

00

106,

000

122,

000

221,

000

183,

000

164,

000 19

6,00

0

360,

000

226,

000

243,

000

96,0

00

110,

000

88,0

00

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

0

84,0

00

166,

000

188,

000 22

5,00

0

330,

000

236,

000

286,

000

249,

000

213,

000 25

0,00

0

221,

000

423,

000

329,

000

201,

000

264,

000

126,

000

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

Jan-

11

Mar

-11

May

-11

Jul-1

1

Sep

-11

Nov

-11

Jan-

12

Mar

-12

May

-12

Jul-1

2

Sep

-12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-1

3

Sep

-13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-1

4

Sep

-14

Nov

-14

Jan-

15

Mar

-15

1-m

onth

net

cha

nge


3

As a a result of this slowdown and downward revisions to

previous months, unemployment stayed steady at 5.5 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


4

Despite March’s below-average figures, job openings are

higher than the previous cycle


5

0

1,000

2,000

3,000

4,000

5,000

6,000

Job

open

ings

(th

ousa

nds)

-11.0

-3.0

-1.0

-1.0

-1.0

-0.1

0.0

0.0

0.6

2.0

5.8

8.0

9.5

11.4

13.0

25.9

30.0

38.0

40.0

-20 -10 0 10 20 30 40 50

Mining and logging

Government

Nondurable goods

Manufacturing

Construction

Utilities

Other services

Durable goods

Motor vehicles and parts

Information

Wholesale trade

Financial activities

Transportation and warehousing

Temporary help services

Leisure and hospitality

Retail trade

Health care and social assistance

Education and health services

Professional and business services

1-month net change (thousands)

Goods-producing sectors, particularly mining and logging, saw

the fatest monthly contractions in March


6

PBS

Education and health

Retail trade

All other subsectors

Top three

subsectors

responsible for

82.5 percent of

monthly

growth.

The 13,000-job contraction in goods-producing employment

broke these industries’ 14-month growth streak

-1,000.0

-800.0

-600.0

-400.0

-200.0

0.0

200.0

400.0

600.0

2008 2009 2010 2011 2012 2013 2014 2015

1-m

onth

net

cha

nge

(tho

usan

ds)

Goods-producing Service-providing


7

4.0

6.7

17.0

47.4

59.0

72.0

73.0

110.2

143.8

150.0

163.6

171.0

188.0

282.0

326.1

474.6

490.0

541.0

662.0

0 100 200 300 400 500 600 700

Mining and logging

Utilities

Nondurable goods

Motor vehicles and parts

Information

Government

Other services

Wholesale trade

Temporary help services


Transportation and warehousing

Durable goods

Manufacturing

Construction

Retail trade

Health care and social assistance


Education and health services

Professional and business services

12-month net change (thousands)

PBS

Education and health


Retail trade

Manufacturing


All other jobs

On an annual basis, growth in all sectors remains positive; 12-

month net change totaled 3.1 million


8

Core subsectors added 75.4 percent

of all jobs over the past 12 months.

0

2

4

6

8

10

12

Une

mpl

oym

ent (

%)

Bachelor's degree and higher High school graduates, no college

White-collar unemployment fell once again, down to 2.5

percent in March

2.5%

5.3%


9

Wage growth continues to rise at a steady pace as a result of

labor market growth, likely to see further gains in 2015

$21.00

$21.50

$22.00

$22.50

$23.00

$23.50

$24.00

$24.50

$25.00

$25.50

2010 2011 2012 2013 2014 2015

Ave

rage

hou

rly w

age


Labor force participation in both segments continues its slow,

downward trajectory


11

54.0%

55.0%

56.0%

57.0%

58.0%

59.0%

60.0%

61.0%

62.0%

63.0%

64.0%

70.0%

71.0%

72.0%

73.0%

74.0%

75.0%

76.0%

77.0%

78.0%

79.0%

80.0%

2007 2008 2009 2010 2011 2012 2013 2014 2015

Hig

h sc

hool

gra

duat

e la

bor

forc

e pa

rtic

ipat

ion

rate

(%

)

Col

lege

gra

duat

e la

bor

forc

e pa

rtic

ipat

ion

rate

(%

)

Bachelor's degree High school, no college

Tech and office-using employment growth largely stable despite

slowdown elsewhere

-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

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 February 2015.

12

12-m

onth

% c

hang

e (jo

bs)

Tech still leading; energy demonstrating first signs of decline in

response to falling prices Year-on-year percent employment growth


13

Consistent jobless claims in light of slowdown indicate that

March was an aberrant month in an otherwise strong recovery

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

14

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

1,000

2,000

3,000

4,000

5,000

6,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

Hire

s an

d qu

its (

thou

sand

s)

Hires Quits

Hires and quits continue to rise slowly, but growth indicates

increased employee confidence


Silicon Valley job creation surpasses 5.0 percent annually, while

Atlanta joins red-hot Texas and Florida markets


16

Silicon Valley

5.3%

San Francisco

4.7%

Dallas

4.4%

Atlanta

4.3%

Fort

Lauderdale

4.3%

Miami

4.0%

Some East Coast and Midwestern markets are still posting

job growth below 1.0 percent year-on-year, however

17


Hampton

Roads

0.8%

St. Louis

0.9%

Milwaukee

0.9%

Pittsburgh

0.9% Cleveland

1.1%

Fairfield

County

1.1%

Total unemployment is still falling faster than the official rate,

down 10bp to 10.9 percent in March

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

Total unemployment U-6 10-year average


18

Labor force participation declined by 10bp to 62.7 percent,

helping to suppress unemployment somewhat


19

60.0%

61.0%

62.0%

63.0%

64.0%

65.0%

66.0%

67.0%

2008 2009 2010 2011 2012 2013 2014 2015

Labo

r fo

rce

part

icip

atio

n ra

te (

%)

Re-entrants and new entrants to the workforce have also fallen

precipitiously, contributing to lower unemployment

0

1,000

2,000

3,000

4,000

5,000

6,000

2010 2011 2012 2013 2014 2015

Ent

rant

s (t

hous

ands

)

Re-entrants New entrants


A quiet month for many sectors resulted in office-using

industries comprising nearly two in every five new jobs


21

Although financial activities and information are becoming more

stable, office-using growth is contributing less to overall gains

-300

-250

-200

-150

-100

-50

0

50

100

150

200

2009 2010 2011 2012 2013 2014 2015

Information Professional and business services Financial activities

PBS represented 78.2 percent of office jobs lost in February 2010.

In February 2015, it represented 80.0 percent of monthly growth.


22

After two months of contraction, temporary help services grew

in March to almost 2.9 million jobs

1,000.0

1,200.0

1,400.0

1,600.0

1,800.0

2,000.0

2,200.0

2,400.0

2,600.0

2,800.0

3,000.0

-100.0

-80.0

-60.0

-40.0

-20.0

0.0

20.0

40.0

60.0

80.0

2009 2010 2011 2012 2013 2014 2015

Mon

thly

net

cha

nge

in jo

bs (

ths)

Temporary employment monthly net change Temporary employment

Temporary em

ployment (ths)


23

©2015 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

[email protected]

John Sikaitis

Managing Director - Office and Local Markets Research

[email protected]

Phil Ryan

Research Analyst – Office and Economy Research

[email protected]

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research at jll.com.

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April 2015 U.S. employment update and outlook

Economy & Finance