Insights in Seniors Housing & Care
The U.S. Bureau of Labor Statistics reported that nonfarm payrolls rose by 372,000 in June 2022 and the unemployment rate held steady at 3.6%. The June increase was in line with the average monthly gain over the prior three months (383,000). Revisions subtracted 72,000 to total payrolls in the previous two months. The market consensus had been for a gain of 268,000.
Nonfarm payrolls were still down by 524,000 or 0.3% from their pre-pandemic level in February 2020. Notably, private-sector employment has now recovered the net job losses due to the pandemic and is 140,000 higher than in February 2020, while government employment is 664,000 lower.
Employment in business and professional services is 880,000 higher than in February 2020, while manufacturing jobs have returned to its pre-pandemic level. However, employment in leisure and hospitality services are down by 1.3 million or 7.8% since February 2020, while jobs in social assistance which includes child day care services are 2.0% below their February 2020 level.
Employment in health care rose by 57,000 in June, including 8,000 new positions in nursing and residential care facilities. But jobs in health care remain 1.1% or 176,000 less than in February 2020.
The report confirms that the labor market remains strong, despite inflationary pressures, waning consumer confidence, the war in Ukraine and on-going supply-chain pressures. Concerns about rising wage costs and inflation are also supported by this report, although wage pressures appear to be easing. Average hourly earnings for all employees on private nonfarm payrolls rose by $0.10 in June to $32.08. This was a gain of 5.1% from year-earlier levels but was less than the 5.3% gain seen in May and the 5.5% gain seen in April.
The report supports the Federal Reserve’s intention of continuing to raise interest rates further following the 1.5 percentage point hike in the fed funds rate that has already occurred so far this year. Another 0.75 percentage point hike is anticipated at the next FOMC meeting later this month.
In a separate survey conducted by the BLS, the jobless rate was 3.6% for the fourth month in a row. The jobless rate is only 0.1 percentage point above the pre-pandemic level of 3.5% seen in February 2020, and well below the 14.7% peak seen in April 2020. The number of persons unemployed was essentially unchanged at 5.9 million but was still above the 5.7-million-person level seen prior to the pandemic.
Among the major worker groups, the June unemployment rates were 3.43% for adult women, adult men (3.3%), teenagers (11.0%), White (3.3%), Black (5.8%), Asian (3.0%), and Hispanic (4.3%).
The labor force participation rate edged down 0.1 percentage point to 62.2% in June and was below the February 2020 level of 63.4%.
The June underemployment rate or the U-6 jobless rate was 6.7%, up from 7.1% in May 2022. This figure includes those who have quit looking for a job because they are discouraged about their prospects and people working part-time but desiring a full work week.
Beth Burnham Mace is a special advisor to the National Investment Center for Seniors Housing & Care (NIC) focused exclusively on monitoring and reporting changes in capital markets impacting senior housing and care investments and operations. Mace served as Chief Economist and Director of Research and Analytics during her nine-year tenure on NIC’s leadership team. Before joining the NIC staff in 2014, Mace served on the NIC Board of Directors and chaired its Research Committee. She was also a director at AEW Capital Management and worked in the AEW Research Group for 17 years. Prior to joining AEW, Mace spent 10 years at Standard & Poor’s DRI/McGraw-Hill as director of its Regional Information Service. She also worked as a regional economist at Crocker Bank, and for the National Commission on Air Quality, the Brookings Institution, and Boston Edison. Mace is currently a member of the Institutional Real Estate Americas Editorial Advisory Board. In 2020, Mace was inducted into the McKnight’s Women of Distinction Hall of Honor. In 2014, she was appointed a fellow at the Homer Hoyt Institute and was awarded the title of a “Woman of Influence” in commercial real estate by Real Estate Forum Magazine and Globe Street. Mace earned an undergraduate degree from Mount Holyoke College and a master’s degree from the University of California. She also earned a Certified Business Economist™ designation from the National Association of Business Economists.
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