March 2017 U.S. employment update and outlook

National employment
situation: February 2017
March 10, 2017

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

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

360,000
226,000
243,000
96,000
110,000
88,000
106,000
122,000
221,000
183,000
164,000
196,000
360,000
226,000
243,000
96,000
110,000
88,000
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
274,000
84,000
166,000
188,000
225,000
330,000
236,000
286,000
249,000
213,000
250,000
221,000
423,000
329,000
221,000
265,000
84,000
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
24,000
271,000
252,000
176,000
208,000
135,000
164,000
155,000
238,000
235,000
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 2017
1-monthnetchangeFebruary recorded a strong 235,000 new jobs; upward
revisions to January bring 3-month total to 628,000
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
Unemploymentrate(%)
1-monthnetchange(thousands)
1-month net change Unemployment rate
Unemployment dipped by 10bp to 4.7 percent as job
creation outpaced workforce expansion and participation

2,000
2,500
3,000
3,500
4,000
4,500
5,000
5,500
6,000
6,500
Jobopenings(thousands)Job openings ended 2016 on a flat note at 5.5 million
for a third consecutive month

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

-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

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
Trade, transportation and utilities
Construction
Manufacturing
Mining and logging
Other services
Information
12-month wage growth (%)
Office-using industries (except information) seeing
lowest rates of wage growth after education and health

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

-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

-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
Government
Other services
Transportation and warehousing
Mining and logging
Wholesale trade
Durable goods
Nondurable goods
Manufacturing
Health care and social assistance
Construction
Education and health services
1-month net change (thousands)
Healthy education, health, construction and
manufacturing growth counter contraction in retail

-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
Government
Construction
Health care and social assistance
Education and health services
12-month net change (thousands)
Distribution of annual employment growth by sector
has been relatively consistent of late
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.

0%
1%
2%
3%
4%
5%
6%
12-month%changeUnemployment for bachelor’s degree holders remains
at a cyclical low of 2.4 percent

-300
-250
-200
-150
-100
-50
0
50
100
150
200
2009 2010 2011 2012 2013 2014 2015 2016 2017
1-monthnetchange(thousands)
Professional and business services Financial activities Information
Pullback in financial activities slowed office-using
sectors’ growth in February

-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
12-month%change
Tech Energy, mining and utilities Office-using Total non-farm
Energy’s annual contraction has rapidly diminished and
will likely return to growth by year-end

200,000
250,000
300,000
350,000
400,000
450,000
500,000
550,000
600,000
650,000
700,000
Initialunemploymentclaimsperweek
Intial weekly claims 4-week moving average
Initial unemployment claims remain on their record
downward trend, with numerous weeks below 240,000
17Source: JLL Research, U.S. Department of Labor

0
20
40
60
80
100
120
140
ConsumerconfidenceindexConsumer confidence surpasses 15-year high reached
in December; up 22.1 percent year-over-year
18Source: JLL Research, Conference Board

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

0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
12-month%change
Total unemployment 10-year average
Total unemployment fell once again and is now at 9.2
percent

March 2017 U.S. employment update and outlook

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