Insights in Seniors Housing & Care
The Labor Department reported that nonfarm payrolls rose by a strong 850,000 in June 2021. The consensus estimates for June had been for a gain of 720,000. Employment is now up by 15.6 million since April 2020 but is down by 6.8 million or 4.4% from its pre-pandemic level in February 2020.
The robust jobs report followed reports earlier this week that show a strengthening economy. This includes reports of strong consumer confidence, improving outlooks for capital spending by businesses and a report from the Congressional Budget Office (CBO) that projected a full recovery of pandemic-related job losses by the middle of 2022.
Notable job gains occurred in leisure and hospitality (343,000), in public and private education, professional and business services, retail trade and other services.
Separately and from a different survey, the Labor Department reported that the unemployment rate inched up to 5.9% in June from 5.8% in May. The jobless rate is now 2.4 percentage points above the pre-pandemic level of 3.5% seen in February 2020, but well below the 14.7% peak seen in April 2020. The underemployment rate or the U-6 jobless rate was 9.8% down from 10.2% in May 2021. 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) increased by 233,000 to 4.0 million but is 2.9 million higher than in February 2020, suggesting that this continues to be a very challenging time for many Americans. Long-term unemployed persons account for 42.1% 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 61.6% in June and has remained within a narrow range of 61.4% to 61.7% since June 2020. The participation rate is 1.7 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 $0.10 in June to $30.40, a gain of 3.6% from a year earlier and followed an increase of $0.21 in April. The data suggests that rising demand for labor associated with the recovery from the pandemic may be putting upward pressure on wages. That said, the Labor Department warns that 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 April was revised down by 9,000 from a gain of 278,000 to 269,000 and the change for May was revised up by 24,000 from 559,000 to 583,000. With these revisions, employment in April and May combined is 15,000 higher 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 June data was encouraging after disappointing gains in April and
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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