June 2015 U.S. employment update and outlook

U.S. employment situation: September 2013

Release date: October 22, 2013

May’s rebound demonstrates the

strength of the U.S. labor market

U.S. employment situation: May 2015 June 5, 2015

May 2015 employment summary

• After a bumpy beginning to 2015, the labor market regained its resilience in May, with 280,000 new jobs created over the course of the

month, resulting in year-to-date gains of 1.1 million jobs. Additionally, previous months saw upward revisions for the second month in a row.

• Unemployment increased by 10 basis points to 5.5 percent. This was likely due to a 10-basis-point increase in the labor force participation

rate, which now stands at 62.9 percent. Total unemployment, on the other hand, remained the same at 10.8 percent and is now

consistently below its 10-year average.

• Unemployment for college graduates stayed the same in May at 2.7 percent, slightly less than half the national rate. However, labor force

participation remains relatively flat, particularly for high-school graduates.

• Sustained employment and a looming talent crunch in major markets becoming more apparent have enabled wages to grow even more

above the rate of inflation, in part due to the ongoing collapse in energy prices. Private-sector wages are up 2.3 percent year-on-year, while

those in professional and business services are growing even faster at 2.4 percent.

• Office-using industries contributed 73,000 jobs to May’s growth, roughly the same as in April. PBS moved back to stable levels of gains at

63,000 jobs, while financial activities posted a month-to-month increase of 13,000 jobs. However, the gains in education and health meant

that PBS was only the second-largest industry in terms of monthly growth and office-using jobs contributed just 26.1 percent of total gains

during May.

• At the market level, Silicon Valley saw 6.0-percent annual job growth, among the highest rates recorded for a JLL-tracked market this cycle.

Tech-heavy markets such as San Francisco and Seattle as well as the rapidly growing Sun Belt markets such as the Carolinas, South

Florida and red-hot Texas remain leaders, although Houston is beginning to see a sharp slowdown in employment growth to 2.3 percent,

compared to the nearly 4.0-percent growth just one year ago.

- Even slower-growth markets, particularly those in the Great Lakes, Midwest and Northeast, posted small but significant bumps in annual

growth rates.

Source: JLL Research, Bureau of Labor Statistics

May 2015 labor market at a glance

+280,000

1-month net change

+3,058,000

12-month net change

+672,000

10-year average annual growth


5.5%

Unemployment rate

-80bp

12-month change in unemployment

7.1%

10-year average unemployment

4,994,000

Job openings

5,067,000

Hires

2,783,00

Quits

With 280,000 new jobs created, May returned to the strong

levels of growth seen at the end of 2014 36

0,00

0 22

6,00

0 24

3,00

0 96

,000

11

0,00

0 88

,000

10

6,00

0 12

2,00

0 22

1,00

0 18

3,00

0 16

4,00

0 196,

000

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

,000

16

6,00

0 18

8,00

0 225,

000

330,

000

236,

000

286,

000

249,

000

213,

000 25

0,00

0 22

1,00

0 42

3,00

0 32

9,00

0 20

1,00

0 26

6,00

0 11

9,00

0 22

1,00

0 28

0,00

0

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

May

-15

1-m

onth

net

cha

nge

4


YTD gains of 1.1 million new jobs keep unemployment steady

at 5.5 percent as labor force participation inches up

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 hover around the 5.0-million mark,

up 18.6 percent year-on-year


6

0

1,000

2,000

3,000

4,000

5,000

6,000

Job

open

ings

(th

ousa

nds)

-18.0

-3.0

1.0

1.1

2.0

4.1

6.0

6.6

7.0

13.0

13.1

17.0

18.0

20.1

31.4

57.0

57.7

63.0

74.0

-40 -20 0 20 40 60 80

Mining and logging

Information

Durable goods

Utilities

Other services

Wholesale trade

Nondurable goods

Motor vehicles and parts

Manufacturing

Financial activities

Transportation and warehousing

Construction

Government

Temporary help services

Retail trade

Leisure and hospitality

Health care and social assistance

Professional and business services

Education and health services

1-month net change (thousands)

Education and health services led employment growth in May,

while mining and logging continues to contract


7

Education and health

PBS


All other subsectors

Top three

subsectors

responsible for

69.3 percent of

monthly

growth.

A slowdown in construction employment and boosts in

education and health resulted in service-heavy gains in May

-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


8

-43.0

10.9

33.0

57.9

60.0

62.0

91.0

100.0

146.5

148.0

160.0

160.3

181.0

273.0

314.0

439.0

519.0

592.0

671.0

-200 0 200 400 600 800

Mining and logging

Utilities

Nondurable goods

Motor vehicles and parts

Information

Other services

Wholesale trade

Government

Transportation and warehousing

Durable goods


Temporary help services

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

All subsectors but mining and logging, which has been

affected by a slump in energy prices, have seen annual growth


9

Core subsectors added 77.1 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 (

%)

White-collar unemployment stayed stable at 2.7 percent in

May, half the national rate


10

Labor force participation rose once again (+40bp) for

bachelor’s degree holders, stable for high-school graduates


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

On an annual basis, energy has begun to contract as oil prices

remain well below average

-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 April 2015.

12

12-m

onth

% c

hang

e (jo

bs)

Tech job creation continues to hover slightly below 6.0 percent

due to sustained industry demand Year-on-year percent employment growth


13

Weekly claims over the course of 2015 have averaged just

286,000 and continue to fall slowly

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 remain steady, up 7.7 and 13.1 percent,

respectively


Silicon Valley job creation reaches 6.0 percent year-on-year,

continuing to lead among major markets


16

San Francisco

4.9%

Silicon Valley

6.0% Atlanta

3.4%

Miami

3.4%

Dallas

3.9%

Austin

3.2%

Seattle

3.9%

Some East Coast and Midwestern markets are still growing

slower, but have seen a small bump of late

17


Hampton

Roads

0.5%

St. Louis

0.2%

Milwaukee

1.4%

Pittsburgh

1.3% Cleveland

1.0%

Philadelphia

1.1%

Unlike the official unemployment rate, total unemployment

was flat at 10.8 percent

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 increased by 10 basis points to 62.9

percent, an influence in the slight uptick in unemployment


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 (

%)

Significant growth in education, health, leisure, hospitality and

other subsectors reduced office-using industries’ share of gains


20

Despite a small contraction in information, growth in financial

activities and PBS kept office-using jobs gains stable

-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


21

Temporary help services posted another month of increase, but

continues to grow slower than earlier in the recovery

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)


22

©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.

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Ben Breslau

Managing Director - Americas Research

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Managing Director - Office and Local Markets Research

[email protected]

Phil Ryan

Research Analyst – Office and Economy Research

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June 2015 U.S. employment update and outlook