The unemployment rate dropped slightly to 4.7 percent, but employers added 235,000 new jobs in February, continuing January's strong employment momentum.
2. February 2017 U.S. labor market at a glance
2
+235,000
(77 consecutive months
of growth)
1-month net change
+2,350,000
(+1.6% y-o-y)
12-month change
+792,000
10-year average annual growth
4.7%
Unemployment rate
5,501,000
(+4.2% y-o-y)
Job openings
-20bp
12-month change in unemployment
63.0%
Labor force participation rate
5,252,000
(-2.8% y-o-y)
Hires
2,979,000
(-3.5% y-o-y)
Quits
Source: JLL Research, Bureau of Labor Statistics
3. 2017’s first two months have been strong
Both January and February have posted gains of more than 200,000 jobs this year, bringing year-to-date employment growth to 473,000 net new jobs, up 18
percent from this time last year. As expansion in the labor force occurred slower than jobs were being created, unemployment fell once again to 4.7 percent.
Gains have been relatively diversified, while a contraction in retail trade was countered by improvements in a broad swath of industries. On the other hand,
flatlining in job openings is a likely indicator of the increased difficulty in hiring as full employment is approached.
External economic indicators remain positive
Along with the labor market, numerous economic indicators remain positive. Consumer confidence surpassed its 15-year high reached in December, while
initial unemployment claims continue have fallen to below 240,000 in recent weeks. As competition for talent only intensifies, wages are up 2.8 percent on an
annual basis and continue to outpace inflation despite the rapid rebound in the CPI that began in late 2016. Sustained increases in disposable income will keep
GDP at its ~2.0 percent rate, further driving demand for goods and services that will ultimately translated to office occupancy growth.
Conditions favorable for further Fed tightening
Upbeat labor-market and economic indicators, particularly the CPI now above the 2.0-percent threshold, further the case for the Federal Reserve to raise interest
rates in the short term. This would represent the third time that the Federal Reserve has increased the federal funds rate this cycle after 0.25bp hikes in
December 2015 and December 2016.
February 2017 U.S. labor market highlights
3Source: JLL Research, Bureau of Labor Statistics
7. 2.2%
2.6%
2.8%
3.1%
3.6%
4.0%
4.1%
4.3%
4.3%
4.9%
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0%
Construction
Manufacturing
Mining and logging
Information
Trade, transportation and utilities
Other services
Financial activities
Leisure and hospitality
Professional and business services
Education and health
Job openings rate (%)
Goods-producing sectors such as mining, construction
and transportation are seeing job opening rates rise
7Source: JLL Research, Bureau of Labor Statistics
8. -3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
12-month%change
Wage growth Inflation
30bp rebound in annual wage growth to 2.8 percent
outpaced inflation, which has risen to 2.5 percent
8Source: JLL Research, Bureau of Labor Statistics
9. 1.9%
2.4%
2.4%
2.6%
2.7%
2.8%
3.1%
3.2%
3.5%
4.0%
0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5%
Education and health
Financial activities
Professional and business services
Trade, transportation and utilities
Construction
Manufacturing
Mining and logging
Other services
Information
Leisure and hospitality
12-month wage growth (%)
Office-using industries (except information) seeing
lowest rates of wage growth after education and health
9Source: JLL Research, Bureau of Labor Statistics
10. 62%
63%
63%
64%
64%
65%
65%
66%
66%
67%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
12-month%changeLabor force participation rose by another 10bp to 63.0
percent, buffering further declines in unemployment
10Source: JLL Research, Bureau of Labor Statistics
11. -6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
12-month%change
Civilian labor force Employment
Although the participation rate is rising, labor force
expansion is slowing
11Source: JLL Research, Bureau of Labor Statistics
12. -26.0
-3.5
-1.0
0.0
3.1
7.0
8.0
8.0
8.8
9.0
9.9
10.0
18.0
26.0
28.0
32.5
37.0
58.0
62.0
-40 -30 -20 -10 0 10 20 30 40 50 60 70
Retail trade
Motor vehicles and parts
Utilities
Information
Temporary help services
Financial activities
Government
Other services
Transportation and warehousing
Mining and logging
Wholesale trade
Durable goods
Nondurable goods
Leisure and hospitality
Manufacturing
Health care and social assistance
Professional and business services
Construction
Education and health services
1-month net change (thousands)
Healthy education, health, construction and
manufacturing growth counter contraction in retail
12Source: JLL Research, Bureau of Labor Statistics
13. -30.0
-28.0
-14.0
-1.6
6.8
7.0
35.0
50.2
57.0
91.0
101.0
128.4
190.0
194.0
219.0
441.2
486.0
546.0
597.0
-100 0 100 200 300 400 500 600 700
Mining and logging
Durable goods
Information
Utilities
Motor vehicles and parts
Manufacturing
Nondurable goods
Wholesale trade
Other services
Temporary help services
Transportation and warehousing
Retail trade
Financial activities
Government
Construction
Health care and social assistance
Leisure and hospitality
Education and health services
Professional and business services
12-month net change (thousands)
Distribution of annual employment growth by sector
has been relatively consistent of late
13Source: JLL Research, Bureau of Labor Statistics
597.0
546.0
486.0
190.0
128.4
395.6
PBS Education and health
Leisure and hospitality Financial activities
Retail trade Manufacturing
All other jobs
Core subsectors added 83.2 percent of all
jobs over the past 12 months.
19. Few markets continue to see job growth of more than
3.0 percent as full employment is approached
19
3.2%
3.3%
3.3%
3.4%
3.4%
3.4%
3.4%
4.2%
2.5% 3.0% 3.5% 4.0% 4.5%
Denver
Dallas
Jacksonville
Silicon Valley
Fort Lauderdale
Seattle-Bellevue
Sale Lake City
Orlando
12-month % change
Source: JLL Research, Bureau of Labor Statistics