Yesterday we discussed how the first-quarter’s revised GDP figures caught economists by surprise, but didn’t lead to panic because of recent data which shows that the economy has picked up steam since then. One of these data points is the latest jobs report which has also surprised economists, but unlike the downward revision in GDP, this time they were pleasantly surprised by the number of jobs that the economy created in June. As the economy continues to create more jobs and enable consumers to spend more, senior housing providers who are seeking capital to take advantage of this situation should continue to look to the successful Chicago-based firm Cambridge Realty Capital for their financing needs.
Details from the Jobs Report
According to the jobs report that was just released by the Labor Department, the economy added 288,000 net new jobs in June which helped the unemployment rate fall from 6.3% to 6.1%, the lowest it has been since September 2008. June was also the fifth straight month that the economy added over 200,000 jobs and this greatly outpaced the 215,000 that economists were expecting. The job figures for April and May were also revised upwards by a combined 29,000 and April’s updated job gains of 304,000 was the highest monthly figure since January 2012. In other welcome news, the Labor Department also reported that the number of long-term unemployed decreased and the number of workers who had either given up looking for work or who weren’t currently looking for work also decreased from 7.6% in May, to 7.3% in June. Economists were also happy to hear that June’s job gains were broad-based with the retail industry creating 40,000 new jobs, the leisure and hospitality industry creating 39,000, the construction industry creating 6,000, and the manufacturing industry creating 16,000 new jobs. However, it wasn’t all good news as the jobs report also noted that the labor participation rate continued to remain stubbornly high at 62.8% and average hourly wages for private sector employees increased by only $.06 from May to June. Overall though, June’s jobs report was well received and indicates that the economy has recovered from the slowdown it experienced during the first-quarter. Indeed, this sentiment has been echoed by many economic observers including Joshua Shapiro, the chief U.S. economist at MFR Inc. In commenting on the jobs report, Mr. Shapiro stated that, “The latest five monthly jobs reports are consistent with the view that, in spite of a horrendous first-quarter GDP result that was the victim of a ‘perfect storm’ of negative circumstances, the economy is well underpinned,” and other economists expressed similar views after analyzing the jobs report.
With the economy on the mend, economists will now focus their attention on the Federal Reserve to see if the latest job figures lead to any changes in monetary policy. The Federal Reserve has been tapering its quantitative easing program by $10 billion each month since January and it will be interesting to see if the latest job figures encourage them to increase that amount after its next meeting. As the economy continues to pick up steam, this will give the Fed more room to wind down its various stimulus programs and increase interest rates. Before this takes place, senior housing providers who are interested in obtaining inexpensive capital for growth or other needs should contact Cambridge Realty Capital to learn more about the many different financing programs it offers.