NIC Notes

Insights in Seniors Housing & Care


By: Beth Mace  |  February 03, 2023

Jobs Surge 517,000 in January; Jobless Rate Slides to 3.4%

Business Environment  |  Economic Trends  |  Workforce

The unemployment rate fell to 3.4% in January, its lowest level since 1969 and below December’s already low rate of 3.5%.  Separately, the U.S. Bureau of Labor Statistics also reported that nonfarm payrolls rose by a very large 517,000 in January 2023, nearly twice as much as in December (260,000) and more than the monthly average of 401,000 in 2022.  Market expectations had called for a gain of less than 200,000 jobs.  Revisions added 71,000 positions to total payrolls in the previous two months.  The monthly gain and revisions paint an image of a still strong labor market.  

Today’s labor report will add further impetus to the Fed’s policy conviction of nudging interest rates higher after already increasing rates aggressively last year and one month into 2023.  Indeed, at the FOMC meeting this past week, the Fed announced a 25-basis point increase in the Fed Funds rate to a range of 4.50% to 4.75%.  While this was a smaller increase than those in 2022, it nevertheless brought rates to their highest level since 2007.  Further, in its official statement, the Fed indicated that “ongoing increases” in rates would still be required.  Further, Federal Reserve Chair Jay Powell said he thought it would take “a couple of more rate hikes to get to that level we think is appropriately restrictive.” The Fed is hyper-focused on the rate of inflation and wants to be confident that inflation can be sustained at a 2% target range.  At this point, the Fed is not convinced that this is the case despite evidence that inflation is decelerating.  While goods inflation does indeed appear to be slowing, service inflation, largely driven by wages, continues to be worrisome.

Civilian Unemployment

Indeed, average hourly earnings for all employees on private nonfarm payrolls rose by $0.10 in January to $33.03.  This was a gain of 4.4% from year-earlier levels, but lower than in recent months.

Employment in health care rose by 58,000 in January and after averaging 47,000 jobs per month in 2022.   Employment in nursing care facilities grew by 4,500 jobs from last month and 35,600 from year-earlier levels and stood at 1,380,100 positions.  Jobs increased by 8,400 positions in CCRC and assisted living facilities and were up by 60,700 from year earlier levels to 930,700 jobs.

In the household survey conducted by the BLS, the jobless rate fell from 3.5% in December and stood at 3.4% in January. Both months’ unemployment rates were well below the 14.7% peak seen in April 2020.

Employment Change

The labor force participation rate stood at 62.4% in January, up from 62.3% in December but was below the February 2020 level of 63.3%.   

Among the major worker groups, the January unemployment rates were 3.1% for adult women, adult men (3.2%), teenagers (10.3%), Whites (3.1%), Hispanics (4.5%), Blacks (5.4%), and Asians (2.8%).

About Beth Mace

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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