Insights in Seniors Housing & Care
The Labor Department reported that nonfarm payrolls rose by 266,000 in April. This was a sharp slowdown from the downwardly revised gain of 770,000 in March, originally reported as 916,000. The consensus estimates for April had been for a gain of 1,000,000. Despite the April increase, job levels remain 8.2 million below the pre-pandemic levels of February 2020.
Employment in health care changed little in April (-4,000) as a gain in ambulatory health care services (+21,000) was largely offset by a job loss of 19,000 in nursing care facilities. Health care employment is down by 542,000 since February 2020.
Separately and from a separate survey, the Labor Department reported that the unemployment rate edged up to 6.1% from 6.0% in March. The jobless rate is now 2.6 percentage points above the pre-pandemic level of 3.5% seen in February 2020, but well below the 14.7% peak seen in April.
The underemployment rate or the U-6 jobless rate was unchanged at 10.4% down from 10.7% in March. 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.
The number of long-term unemployed (those jobless for 27 weeks or more) was little changed from March at 4.2 million but is 3.1 million higher than February 2020, suggesting that this continues to be a very challenging time for many Americans. Long-term unemployed persons account for 43.0% of the total number of unemployed persons.
The labor force participation rate, which is a measure of the share of working-age people who are employed or looking for work was steady at 61.7% in April but is 1.6 percentage points lower than in February 2020. Many workers have dropped out of the labor force since the pandemic began to take care of family members or out of fear of working and catching the virus.
Average hourly earnings for all employees on private nonfarm payrolls rose by $0.21 in April to $30.17, a gain of 0.3% from a year earlier. This was well below the 4.2% annual gain recorded in March. Notably, however, the pandemic has affected the ability to fully interpret the wage data due to the wide swings in employment trends.
The change in total nonfarm payroll employment for February was revised down up by 68,000 from a gain of 468,000 to 536,000 and the change for March was revised down by 146,000 from 916,000 to 770,000. With these revisions, employment in February and March combined is 78,000 lower than previously reported. Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.
The April data was disappointing after such robust gains in recent prior months. It may reflect ongoing health-related concerns about the pandemic and the need for workers to still take care of family members, especially school-aged children. That said, the ongoing drop in COVID cases, the widespread distribution of vaccines, and a shift in consumer confidence should support a more complete re-opening of the economy and a fuller recovery in jobs in the coming months. The weak April number also suggests that the Fed will continue in its resolve to not alter its stated monetary policy goals and will keep its bond-buying program intact and interest rates low as it pursues its full employment goal.
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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