May’s jobs report was just released and similar to the Federal Reserve’s most recent Beige Book, the jobs report also indicates that the economy has rebounded from the dip it took during the first quarter and is now growing steadily. This is good news for senior housing providers because economic growth leads to increased income and wealth for consumers, which helps drive demand for senior housing services. As demand for these services increases, senior housing providers who are interested in obtaining inexpensive capital for acquisitions, growth, or other needs, should contact the Chicago-based financing firm Cambridge Realty Capital to learn more about the different financing programs it offers.
Details from the Jobs Report
According to the Bureau of Labor Statistics May jobs report, the economy added 217,000 non-farm jobs in May. This is slightly greater than the 215,000 that economists had projected and increased the average job growth for the past 12 months to 197,000. May’s job gains are also notable because it marks the fourth straight month that non-farm payrolls have increased by more than 200,000 and this is the first time that this has happened since October of 1999. In other good news from the jobs report, there was a year-over-year reduction in the combined under and unemployment rate from 13.4% in May 2013 to 12.2% in May 2014, and an increase in average hourly earnings from $24.33 in April 2014 to $24.38 in May 2014. While economists would like to see more robust wage gains, over the past twelve months average hourly earnings have increased by 2.1%, indicating that they are at least trending in the right direction. With respect to job gains in specific industries, the business and professional services sector did well by adding 55,000 jobs and the healthcare sector also performed well by adding 34,000 jobs.
Overall, the response from economists to May’s jobs report was generally positive. For example, Bart van Ark, the chief economist at the Conference Board, remarked that the consistent job growth the nation has experienced during the past few months is a positive trend and that “more jobs means more paychecks, lifting sentiment and resulting in more consumer buying.” Dr. Tara Sinclair, an economist for the popular job site Indeed.com, noted that they were seeing increased postings in “perennial economic cornerstones like higher education, healthcare and finance,” and that “overall, job posting numbers related to construction have continued to perform strongly since the beginning of 2014, reflecting sustained healthy growth.” The activity on Indeed’s website supports some of the information that was released in the jobs report and is further evidence that job growth is trending in the right direction.
May’s jobs report should also encourage the Federal Reserve’s Open Market Committee to continue tapering its quantitative easing program when its members meet later this month. As this program winds down, the next major decision for the Committee will be when it should raise its benchmark federal funds rate, and by how much. Similar to the jobs report that was just released, economists are also anxious to hear what the Committee has to say on this subject and are looking forward to reviewing the Federal Reserve’s post-meeting press release for insight in this area as soon as it is released later this month.