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​HFF BLS Employment Report November 2015

Monday, December 28, 2015

HFF is pleased to report on the latest employment expansion statistics from throughout the year. Our research team analyzes trends and data to give readers a better view into the current state of the economy and how employment is being affected.

Job and Payroll Growth

During the month of November, employers added 211,000 jobs, higher than forecasted. Additionally, October's jobs figure was revised upward to 298,000 jobs. With November's solid jobs report, the FOMC raised interest rates this month. The current job expansion cycle is similar to 1991 through 2000, and greater than the 2004 to 2007 expansionary period, but only after a significantly delayed recapture of the nation’s previous employment peak.

Average Monthly Payroll Creation Nov. 2015

In 2014, the U.S. created 3.1 million jobs, the highest level of expansion since 1998. The last four years’ job growth is on par with the expansionary period from 1992 to 1995. The 12-month trailing average has declined to 2,860,000 jobs, a more moderate level of growth.

Job Growth Nov. 2015


Quality of Job Growth

Job growth quality has remained a persistent concern during the recovery due to weak wage growth and a concentration of job gains in low-paying sectors. In 2014, the U.S. created 3.1 million jobs. But nearly 35 percent of private-sector job gains came from construction, manufacturing, retailers, hotels, restaurants and temporary help agencies, all typically low-paying sectors.

Quality of Job Growth Nov. 2015

Combined, Retail Trade (284,000) and Leisure and Hospitality (438,000) created approximately 722,000 jobs in the year ended November 2015, accounting for some 27 percent of the headline growth nationwide. Retail Trade accounts for 62 percent of the headline Trade, Transportation and Utilities growth. Given Wholesale Trade (75,800) and Transportation/Warehousing (87,800) account for the remaining share, we can assume continued broad-based growth in the Retail and Industrial property types as we progress deeper into the economic recovery. Professional Business Services, the industry sector most closely aligned with office using employment, experienced expansion of 606,000 jobs in the year ended November 2015.

Quality of Job Growth Analysis Nov. 2015

Fortunately, Temporary Staffing only accounted for 74,000 (~12 percent) of these positions. Temporary Staffing remains stubbornly high; however, the share has decreased in recent months. Education and Health Services, which has performed well throughout the downturn being a recession-resistant industry, expanded by 638,000 jobs in the year ended November 2015, the highest of any major employment sector. Mining and Logging has turned negative from seven months prior and retail continues to account for more headline trade. These potentially worrisome trends are offset by the decrease in temporary staffing.

Quality of Job Growth Changes Nov. 2015


Current Jobless Claims

Though it required a protracted period of time, trends in jobless claims have returned to favorable territory. Initial claims are at last, and predictably, below 300,000 per week. Continuing claims are also finally below 2.5 million per week. Therefore, layoffs appear to have stabilized to more historically average levels.

Jobless Claims Nov. 2015


Jobless Claims vs. Unemployment Rate

Initial claims, an alternative representation of layoffs, are slowly beginning to tick up but are still well below the 47-year average of 364,896. The unemployment rate typically declines at a slower pace than initial claims for unemployment benefits. As stated previously, the level of "bounce" in monthly payroll expansion is on par with the 2004 to 2007 era, but has not proven fast enough to recapture such a significant drop in employment. Retiring employees and the discouraged unemployed are leaving the labor force, reducing the denominator in the equation of the unemployment rate dramatically.

Jobless Claims vs. Unemployment Rate Nov. 2015


Unemployment Rate

The Underemployment Rate includes anyone marginally attached to the labor force that is either not employed or employed only part time. Fortunately, the underemployment rate is descending from a recent high of just over 17 percent. However, the spread between the two rates is near an all-time high and shows no sign of rapid compression.

Unemployment Rate Nov. 2015

 





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