The national labor market saw 156,000 net new jobs added in August, a solid figure but below expectations. Additionally, previous months registered downward revisions to job growth, muting some of the rebound witnessed during the summer. Continuing a trend that has intensified in recent quarters, a lack of skilled workers combined with minimal unemployment and external difficulties such as housing affordability in tech hubs have significantly slowed tech growth over the year. Even with inconsistent inflation, sustained job growth could likely encourage another Federal Reserve rate hike in the near term.

1. National employment
situation: August 2017
September 1, 2017

2. August 2017 U.S. labor market at a glance
2
+156,000
(82 consecutive months of growth)
1-month net change
+2,097,000
(+1.4% y-o-y)
12-month change
+820,000
10-year average annual growth
4.4%
Unemployment rate
6,163,000
(+11.3% y-o-y)
Job openings
-50bp
12-month change in unemployment
62.9%
Labor force participation rate
5,356,000
(+3.5% y-o-y)
Hires
3,134,000
(5.2% y-o-y)
Quits
Source: JLL Research, Bureau of Labor Statistics

3. Monthly gains fell below expectations, but are still solid
The national labor market saw 156,000 net new jobs added in August, a solid figure but below expectations. Additionally, previous months registered downward
revisions to job growth, muting some of the rebound witnessed during the summer. Monthly gains were hindered by minimal growth in leisure and hospitality
(+4,000 jobs) and further decreases in retail trade, which is now in contraction in annual terms. However, manufacturing continued to gain momentum, while
office-using sectors held steady. As a result, unemployment is now holding steady, up 10 basis points over the month to 4.4 percent.
Talent shortages are hampering tech
A lack of skilled workers combined with minimal unemployment and external difficulties such as housing affordability in tech hubs have significantly slowed
tech growth over the year, which is now below the 4.0-percent threshold over the year. In particular, the Bay Area markets of Silicon Valley (+1.0 percent) and
San Francisco (+1.8 percent) have seen a noticeable slowdown in job growth. Potential changes to visa and immigration policies are also adding uncertainty to
the ability of tech firms to recruit talent.
Inconsistent inflation data to complicate Fed’s rate hike decision
After a jump in inflation due to stabilizing gas prices and rising wage growth, inflation has fallen back below 2.0 percent and has wobbled in recent months,
compounding the Federal Reserve’s potential options regarding further interest rate hikes. Consistent job growth, however, could likely encourage another hike
in the near term.
August 2017 U.S. labor market highlights
3Source: JLL Research, Bureau of Labor Statistics

4. 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
126,000
237,000
225,000
153,000
43,000
297,000
291,000
176,000
249,000
124,000
164,000
155,000
216,000
232,000
50,000
207,000
145,000
210,000
189,000
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 2017
1-monthnetchangeAugust’s 156,000 net new jobs fell below expectations,
while previous months saw downward revisions
Source: JLL Research, Bureau of Labor Statistics 4

5. 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 rose by 10 basis points to 4.4 percent,
likely hovering around a cyclical low
5Source: JLL Research, Bureau of Labor Statistics

6. 2,000
2,500
3,000
3,500
4,000
4,500
5,000
5,500
6,000
6,500
Jobopenings(thousands)Job openings jumped to a record high of 6.1 million, up
11.3 percent over the year as demand for talent rises
6Source: JLL Research, Bureau of Labor Statistics

7. 2.9%
3.0%
3.5%
3.6%
3.8%
4.2%
4.2%
4.9%
5.0%
5.5%
0% 1% 2% 3% 4% 5% 6%
Information
Manufacturing
Other services
Mining and logging
Trade, transportation and utilities
Construction
Financial activities
Leisure and hospitality
Education and health
Professional and business services
Job openings rate (%)
Knowledge-intensive sectors such as PBS, education
and health have seen a sharp rise in job opening rates
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
Wage growth shows no signs of accelerating, but
unstable inflation has reduced pressure on consumers
8Source: JLL Research, Bureau of Labor Statistics

9. 2.1%
2.3%
2.3%
2.4%
2.4%
2.5%
2.9%
3.5%
3.6%
4.5%
0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%
Financial activities
Professional and business services
Manufacturing
Education and health
Mining and logging
Construction
Other services
Leisure and hospitality
Trade, transportation and utilities
Information
12-month wage growth (%)
Information, trade and leisure continue to be the
leaders in wage growth
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
Laborforceparticipationrate(%)Slow labor-force expansion has kept the participation
rate flat at 62.9 percent
10Source: JLL Research, Bureau of Labor Statistics

11. 57%
58%
59%
60%
61%
62%
63%
64%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Employment-to-populationratio(%)Despite talent shortages, the employment/population
ratio is still below pre-recession levels
11Source: JLL Research, Bureau of Labor Statistics

12. -9.0
-8.0
-0.5
0.1
0.8
1.9
4.0
6.0
6.3
8.0
10.0
13.7
16.0
16.6
25.0
28.0
28.0
36.0
40.0
-20 -10 0 10 20 30 40 50
Government
Information
Utilities
Temporary help services
Retail trade
Transportation and warehousing
Leisure and hospitality
Mining and logging
Wholesale trade
Nondurable goods
Financial activities
Motor vehicles and parts
Other services
Health care and social assistance
Education and health services
Construction
Durable goods
Manufacturing
Professional and business services
1-month net change (thousands)
A lack of growth in leisure was countered by gains in
manufacturing during August
12Source: JLL Research, Bureau of Labor Statistics

13. -3%
-2%
-1%
0%
1%
2%
3%
2010 2011 2012 2013 2014 2015 2016 2017
12-monthnetchangeRetail trade posted its first annual contraction as of
August, down 0.1 percent over the past 12 months
Source: JLL Research, Bureau of Labor Statistics 13

14. -67.0
-31.2
-2.8
8.0
22.2
38.0
58.0
68.2
73.8
88.0
100.0
126.2
138.0
149.0
214.0
323.0
400.9
476.0
602.0
-200 -100 0 100 200 300 400 500 600 700
Information
Retail trade
Utilities
Government
Motor vehicles and parts
Nondurable goods
Mining and logging
Wholesale trade
Transportation and warehousing
Other services
Durable goods
Temporary help services
Manufacturing
Financial activities
Construction
Leisure and hospitality
Health care and social assistance
Education and health services
Professional and business services
12-month net change (thousands)
Annual growth has become increasingly comprised of
core industries, which represent 80.5 percent of gains
14Source: JLL Research, Bureau of Labor Statistics
602.0
476.0323.0
149.0
138.0
409.0
PBS Education and health
Leisure and hospitality Financial activities
Manufacturing Retail trade
All other jobs
Core subsectors added 80.5 percent of all
jobs over the past 12 months.

15. 0%
1%
2%
3%
4%
5%
6%
12-month%changeUnemployment for bachelor’s degree holders unlikely
to fall any farther from low of 2.3-2.4 percent
15Source: JLL Research, Bureau of Labor Statistics

16. -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
Office-using job growth has held steady throughout
2017, with little sign of changing trends
16Source: JLL Research, Bureau of Labor Statistics

17. -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
Hiring constraints in tech hub and skills shortages
have pushed tech growth to below the 4% mark
17Source: JLL Research, Bureau of Labor Statistics

18. 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
The small increase seen a month ago in initial claims
has gone away; claims still below 250,000
18Source: JLL Research, U.S. Department of Labor

19. 0
20
40
60
80
100
120
140
ConsumerconfidenceindexConsumer confidence continues its upward trend,
rising to a near-high of 122.9 points
19Source: JLL Research, Conference Board

20. Southeastern markets shown no sign of letting up on
job growth in annual terms
20
2.7%
2.7%
2.9%
3.1%
3.2%
3.2%
3.2%
3.2%
3.3%
3.7%
2.5% 3.0% 3.5% 4.0%
Portland
Jacksonville
Nashville
Dallas
Raleigh-Durham
Tampa
Orlando
Atlanta
West Palm Beach
Fort Lauderdale
12-month % change
Source: JLL Research, Bureau of Labor Statistics

21. 0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
12-month%change
Total unemployment 10-year average
As with headline unemployment, total unemployment
has begun to flatline at 8.6 percent
21Source: JLL Research, Bureau of Labor Statistics

22. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. 22
Phil Ryan
Phil.Ryan@am.jll.com
202 719 6295