Insights in Seniors Housing & Care
Today’s Labor Department employment report for the month of October was strong and possibly strong enough for the Federal Reserve to raise its benchmark interest rate at its upcoming December meetings. A rate hike had been expected by many analysts for much of 2015, but weakness in the labor markets, among other things, has kept the Fed on the sidelines.
For October, a 271,000 job gain was reported, above market expectations (183,000). Also, the prior two months were upwardly revised by a combined 12,000 jobs (to 153,000 in August and to 137,000 in September). Job gains have averaged 206,000 per month year-to-date through October. While strong, it was still below the pace of 260,000 per month in all of 2014. Since the low point in September 2010, jobs have consecutively increased every month. This is the equivalent of 5 years and one month (61 months) and marks the longest stretch of monthly consecutive gains for any expansionary period.
The unemployment rate slipped back 10 basis points to 5.0%, the lowest level since April 2008 and near, if not at, the level considered to be “full employment”. The wider measure of unemployment which takes into account discouraged and underemployed workers, also known as the U-6 measure, fell 20 basis points to 9.8%.
Wage growth strengthened in this data release, with average hourly earnings rising at a 2.5% pace from year-earlier levels. This marked a six-year high rate and may reflect anecdotal evidence from seniors housing operators that wage pressures have been mounting.
The report has several indicators in it that will give the Fed more confidence to increase rates at its next FOMC meeting on December 15th and 16th. The Fed has been reticent to increase rates until there have been sufficient evidence that inflation is moving toward its 2% target range and that employment is reaching its “maximum level”. Today’s report may assuage this reluctance.Click to edit your new post...
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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