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U.S. Economy Generated 227,000 Jobs in January 2017

In the first major release of employment conditions under the Trump Administration, the Labor Department reported on Friday that nonfarm payrolls increased by 227,000 positions in January, above the consensus 175,000 estimate. The change in total nonfarm payroll employment for November was revised down from 204,000 to 164,000, and the change for December was revised up from 156,000 to 157,000. With these revisions, employment gains in November and December combined were 39,000 lower than previously reported. Monthly revisions result from additional reports received from businesses since the last published estimates and from the recalculation of seasonal factors.

Employment in healthcare rose by 18,000 in January. Over the past 12 months, the sector has added 374,000 jobs.

The unemployment rate rose 10 basis points to 4.8% in January. The unemployment rate is derived from a separate survey than the payroll employment number cited above. The number of long-term unemployed (i.e., those unemployed for more than 6 months) totaled 1.9 million and accounted for roughly 24.4% of those unemployed. Over the year, the number of long-term unemployed has declined by 244,000.

A broader measure of unemployment, the U-6 unemployment rate (which includes those who are working part-time but would prefer full-time jobs and those who have given up searching), rose to 9.4% in January from 9.2% in December.

Average hourly earnings for all employees on private nonfarm payrolls increased by three cents to $26 in January. Over the year, average hourly earnings have risen by 2.5%, down from 2.8% in December (revised lower from 2.9%). Increases in minimum wage rates in many states and tightening labor markets may start to put further pressure on this measure of earnings.

The labor force participation rate, which is a measure of the share of working age people who are employed or looking for work, rose 0.2 percentage points to 62.9% in January. It is very low by historic standards and in part reflects the effects of retiring baby boomers.

The January jobs report paints a picture of a reasonably strong labor market and lends support for further rate increases by the Federal Reserve. Nevertheless, the Fed is not likely to act immediately due to uncertainty over changes to fiscal policy under the Trump Administration. The next FOMC meeting will take place March 14–15.

About the Author

Beth Burnham Mace

Beth Burnham Mace is the Chief Economist and Director of Outreach at the National Investment Center for Seniors Housing & Care (NIC). Prior to joining the staff at NIC, she served as a member of the NIC Board of Directors for seven years and chaired NIC’s Research Committee. Ms. Mace was also a Director at AEW Capital Management and worked in the AEW Research Group for 17 years. Prior to joining AEW in 1997, Ms. Mace spent ten years at Standard & Poor’s DRI/McGraw-Hill as the Director of the Regional Information Service. She also worked as a Regional Economist at Crocker Bank, the National Commission on Air Quality, the Brookings Institution and Boston Edison.

Ms. Mace is a member of the National Association of Business Economists (NABE), the Urban Land Institute (ULI), ULI’s Senior Housing Council and New England Women in Real Estate (NEWIRE/CREW). 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. Ms. Mace is a graduate of Mount Holyoke College (B.A.) and the University of California (M.S.). She has also earned The Certified Business Economist™ title (CBE) from the National Association of Business Economists (NABE). Ms. Mace is often cited in the Wall Street Journal, the New York Times, Seniors Housing Business, Seniors Housing News and McKnight’s Senior Living and has a bi-monthly column in the National Real Estate Investor.