Weekly virus cases among residents and staff within skilled nursing facilities (SNFs) had been somewhat steady since the vaccine rollout in December 2020. However, the fast-spreading omicron variant has changed the narrative once again and prompted worries around worsening staffing shortages. SNFs are once again faced with rising COVID-19 cases among both residents and staff on top of a reportedly bad flu season compared with 2020.

Weekly Cases Within SNFs Rising at Fastest Rate Ever. Fatalities Remain Relatively Low.

SNFs – NIC’s Skilled Nursing COVID-19 Tracker featuring CMS data as of January 2, 2022, shows that weekly COVID-19 cases within SNFs are rising steeply. Virus cases among staff jumped 475%, from about 5,800 on December 19, 2021, to over 33,400 new cases on January 2, 2022, the highest rate since CMS began reporting data in June 2020. The CDC Nursing Home COVID-19 Dashboard shows that weekly COVID-19 cases among staff set a new record for the week ending January 9, 2022 with over 57,000 new cases, double the peak of fall 2020 cases for COVID-19 (roughly 29,000 reported cases on December 13, 2020).

Over the same period, weekly cases among residents increased dramatically by 240%, from over 4,200 on December 19, 2020, to about 14,400 new cases on January 2, 2022. At the same time, the per-resident rate of new COVID-19 infections rose to 1.33% (133 in 10,000 residents tested positive on January 2) and surpassed levels seen at the height of the Delta variant in September 2021 (0.47%). Per resident rate of new COVID-19 infections is now at levels seen one year ago (1.55% of residents tested positive on January 24, 2021). Newly confirmed cases among residents continued to climb higher through the week ending January 9, 2022, with over 32,000 reported cases.

Regionally – SNFs in the Northeast region reported the highest per-resident rate of new COVID-19 infections at 1.64%, followed by the South (1.43%), the Midwest (1.39%), then the West (0.49%), according to CMS data as of January 2, 2022, compiled by NIC’s Skilled Nursing COVID-19 Tracker. Further, 24% of U.S. SNFs reported newly confirmed cases among residents for the week ending January 2, 2022, nearly three times the share of facilities recorded on December 19, 2021, of 9%.

U.S. – Similarly, weekly cases among the general population rose by 221%, from 968,000 on December 19, 2021, to over 3.1 million cases on January 2, 2022. Weekly cases among the general population continued to rise higher through the week ending January 9 to set new records with 4.9 million cases, averaging about 700,000 new cases daily and nearly triple the peak of January 2021 (U.S. COVID-19 cases topped 1.7 million for the week ending January 10, 2021), according to CDC data compiled by NIC’s Skilled Nursing COVID-19 Tracker.

Fatalities (SNFs) – While the spread of the omicron variant pushed cases off the charts, fatalities among SNF resident remain relatively low. Notably, the per-resident rate of new COVID-19 fatalities averaged about 0.03% weekly since March of 2021 (3 in 10,000 residents died from COVID-19 weekly since March 2021) when most residents and staff in SNFs were vaccinated. For the week ending January 2, 2022, fatalities as percent of residents stood at 0.04%, 50 basis points below the highest level recorded on December 20, 2021 (0.54%).

Other Countries – Interestingly, COVID-19 data from other countries where Omicron has reached its peak, such as the U.K., show that fatalities associated with the Omicron variant are five times fewer than during the Fall 2020 wave. The big disconnect between infections and fatalities in the U.K. reveal an optimistic signal for the U.S. that the Omicron variant may not be as fatal.

Prior Waves – Exhibit 1 below shows that during the fall 2020 wave prior to widespread vaccinations, infections in the country and within SNFs peaked and then fell at the same pace. In other words, it took approximately 12 weeks for recorded cases to peak and a subsequent 12 weeks to decline. Similarly, the Delta variant surge took about eight weeks to peak and eight weeks to decline. The Omicron wave in the U.S. has thus far had a duration of about five weeks, but the data do not yet reveal a trend reversal indicator. However, infections in the U.S. and within SNFs will likely follow the same trajectory as the U.K. and fall at the same pace from which they peaked. In fact, COVID-19 cases in the U.K. are falling very fast and at the same pace in which they peaked.

Since December 2020, vaccinations have made a significant contribution to mitigate the risk of severe illness and fatalities among skilled nursing residents, even during the Delta variant surge in recent months. However, it is still important to realize that skilled nursing facilities need vaccinations in combination with other interventions, including more frequent testing, physical distancing, and adherence to masking guidelines. These interventions continue to be an effective and vital tool to limit the spread of both current Omicron variant and flu cases among residents and staff until cases in the country decline and return to lower levels and until booster shots are more widely distributed.

Exhibit 1 – Weekly COVID-19 Cases (SNFs vs. U.S.) and Fatalities Among SNF Residents

Vaccinations and Boosters (SNFs vs. U.S.)

Exhibit 2 below shows that as of January 2, 2022, 87.0% of residents within SNFs have been fully vaccinated, 54% of residents received a COVID-19 vaccine booster and 1.5% have been partially vaccinated, according to CMS data compiled by NIC’s Skilled Nursing COVID-19 Tracker.

For staff, 81.6% have been fully vaccinated. Unfortunately, staff booster shots are lagging behind, with only 22.6% of staff having received a COVID-19 vaccine booster, 31 percentage points below the rate of residents (54%) who received a vaccine booster. Additionally, 3.5% of staff are partially vaccinated.

More broadly, at the national level, only 62.8% of Americans have been fully vaccinated, 37.5% of fully vaccinated Americans received a booster shot, and 11.9% are partially vaccinated, as of January 13, 2022, according to CDC data.

Exhibit 2 – Vaccination Coverage (SNFs vs. U.S.)

Staffing Shortages Could Get Much Worse and Impact the Near-term Outlook

The impact of staffing shortages on limiting admissions has become evident in recent months, with anecdotal stories of more and more facilities reportedly being concerned about having to limit admissions or temporarily close due to workforce challenges. These labor supply constraints will further challenge the sector’s demand recovery and may impact the near-term outlook for occupancy.

Exhibit 3 below depicts the share of SNFs reporting staffing shortages. For the week ending January 2, 2022, 24.5% of SNFs reported shortages of aides, 22.8% reported shortages of nursing staff, and 13.7% reported shortages of other staff, according to CMS data compiled by NIC’s Skilled Nursing COVID-19 Tracker.

Additionally, the charts below show that high infection rates among staff are driving staffing shortages up within skilled nursing facilities. For example, the largest shares of facilities reporting staffing shortages among hands-on essential workers (aides and nursing staff) are among facilities with high staff infection rates (5%+). Among this cohort, 26.9% of facilities reported shortages of aides and 25.2% reported shortages of nursing staff. Facilities with low infection rates among staff (0-1%) are reporting relatively smaller shares with 23.6% of facilities reporting shortages of aides and 22.0% reporting shortages of nursing staff. The same pattern holds for other staff (15.8% vs. 12.9%).

Drilling deeper into the data by property size, the largest shares of skilled nursing facilities reporting staffing shortages were among small facilities (less than 50 units) with 30.7% reporting shortages of aides, 27.6% reporting shortages of nursing staff, and 17.8% reporting shortages of other staff, while large facilities (100+ units) were reporting the smallest share of facilities experiencing staffing shortages among aides (21.7%), nursing staff (20.7%) and other staff (12.1%). This suggests that small facilities may be facing heightened recruiting and retention challenges than large facilities.

Exhibit 3 – Share of SNFs Reporting Staffing Shortages – By Staff Infection Rates and Property Size

Staffing shortages will likely persist in 2022 and attrition rates may get worse in the near term due to rising infections. The prolonged levels of anxiety and grief that workers have experienced during the pandemic, must be influencing workers’ decisions on staying in place at their current jobs. Nationally, the quit rate among all workers is at a record high, according to the November 2021 JOLTS survey conducted by the BLS.

Improving workers’ experience and building strong staff-resident relationships will be critically important in 2022. Further, maintaining consistency with nursing staff and aides is crucial for the well-being of both residents and staff. High tenure workers tend to have strong relationships with residents and patients, which in turn leads to excellent health and custodial care services for the patient and better job satisfaction for workers.

The staff-resident relationship within the skilled nursing sector is much stronger than the staff-patient rapport in hospitals, simply because the SNFs residents’ length of stay is much longer. This nurse-resident relationship is unparalleled and could serve as a competitive edge to attract and retain workers in skilled nursing facilities.

Staff-to-Resident Ratio vs. Occupancy (CMS)

Exhibit 4 below shows that since June 2021, occupancy (based on CMS data) has been steadily improving. Notably, occupancy increased by 1.8 percentage points, from 70.6% on June 13, 2021, to 72.4% on December 19, 2021. The staff-to-resident ratio has also increased from 1.51 on June 13 to 1.58 on November 28.

However, in the past two weeks following the surge in cases within SNFs, occupancy fell by 0.6 percentage points, from 72.4% on December 19 to 71.8% on January 2, 2022. The staff-to-resident ratio took a downward trend and is now at 1.55.

The staff-to-resident ratio and occupancy will likely continue to fall in the next few weeks due to rising cases further exacerbating staffing challenges and limiting new admissions. However, as Omicron fades away and cases move back to normal levels, these metrics should begin to balance out.

Exhibit 4 – Staff-to-Resident Ratio vs. Occupancy (CMS Data)

To gain in-depth insights and track vaccination coverage, U.S. weekly cases, and the week-over-week change rate for new resident cases and fatalities of COVID-19 within skilled nursing facilities at the state and county levels, visit NIC.org.

One-half of respondents (52%) in Wave 36 anticipate their organization’s operating margins will improve in the next six months. One-third (32%) expect a 1% to 5% increase, and an increasing share (16%) anticipates growth between 6% and 10%. However, labor costs will continue to be a mitigating factor. Nearly all respondents since July have been paying staff overtime, and the use of expensive agency/temp staff is growing, with nine out of ten organizations (89%) now tapping agency/temp staff. The ability to hire from outside of the seniors housing and care industry has grown modestly from 11% to 25% since the Wave 33 survey Factors supporting NOI growth going forward include anecdotal reports of operators beginning to implement rate increases to counterbalance pandemic and recovery-related cost pressures. About one-half (47%) of respondents are currently offering rent concessions (most frequently in the form of rent discounts and free rent for a specific period of time). Single site operators are significantly less likely to offer rent concessions than their larger competitors.

–Lana Peck, Senior Principal, NIC

NIC’s Executive Survey of operators in seniors housing and skilled nursing is designed to deliver transparency into market fundamentals in the seniors housing and care space as market conditions continue to change. This Wave 36 survey includes responses from December 6, 2021, to January 9, 2022, from owners and executives of 66 small, medium, and large seniors housing and skilled nursing operators from across the nation, representing hundreds of buildings and thousands of units across respondents’ portfolios of properties.

Detailed reports for each “wave” of the survey and a PDF of the report charts can be found on the NIC COVID-19 Resource Center webpage under Executive Survey Insights. 

Wave 36 Summary of Insights and Findings

• The pace of move-ins in independent living declined over the past four waves of survey data, while the pace picked up in assisted living and memory care, suggesting a slight slowdown for choice-based seniors housing and an increase in needs-based moves. (The slowdown in independent living may be due to typical patterns of seasonality). Roughly one-half of organizations with assisted living and/or memory care units reported an acceleration in the pace of move-ins (51% and 49%), compared to just over one-third with independent living units (37%). Fewer organizations with nursing care beds reported an acceleration in the pace of move-ins since the previous survey (33% vs. 44%).

• Considering the pace of move-outs in the past 30-days, no change was reported by the majority of organizations across care segments (65% to 68%). More organizations with assisted living units have seen a deceleration in the pace of move-outs than in recent surveys. However, roughly one-quarter of organizations with nursing care beds and/or memory care units reported an acceleration in the pace of move-outs typically due to discharges, natural attrition, and moves to higher levels of care.

• Although the pace of move-ins across care segments was brisk during the past two quarters, and occupancy rates as reported by NIC MAP Vision improved, only around one-third of organizations (29%) indicated that their leads volume were at pre-pandemic levels in Wave 36–down from 36% in the prior survey, but higher than 20% in Wave 26 conducted April 5 to April 18, 2021.

• In Wave 36, nearly two-thirds of organizations (61%) with assisted living units reported increases in occupancy from prior surveys, and nearly one-half (47%) of organizations with nursing care beds saw recent improvement. However, about one-third (32%) of organizations with memory care units noted declining occupancy—down from roughly one-half in Waves 35 and 33 (48% and 55%, respectively). 
• Similar to the pattern shown for the pace of move-ins for the independent living segment, the share of organizations reporting occupancy increases in independent living declined over the past four survey waves from roughly 60% to roughly 40%. 
• Although one-half (50%) of organizations with independent living units noted no change in occupancy compared to one month ago, between one-quarter and one-third (27% and 33%) of organizations with memory care units and/or nursing care beds reported declining occupancy in Wave 36.

• The expected timeframes for occupancy recovery have lengthened among operators. In Wave 36, one-half of respondents expect their organization’s occupancy to return to pre-pandemic levels in 2022 (52% down from 73% in Wave 33), and just over one-third now believe it will recover by 2023 (38% up from 8% in Wave 33).

• Nearly all operators responding to NIC’s Executive Survey Insights conducted since July (98% – 100%) reported staff shortages. In the Wave 36 survey, four out of five organizations with multiple sites (83%) reported staff shortages in more than half of their properties—up from roughly one-half (46%) in the Wave 24 survey conducted mid-March. Attracting community/caregiving staff and employee turnover remain significant challenges for survey respondents.
• When asked how they are backfilling staffing shortages, 97% – 100% of respondents cited overtime hours since Wave 25 (data collected between March 22, 2021, and January 9, 2022). And the use of expensive agency/temp staff is growing. Currently, 89% of organizations are tapping agency or temp staff—up from 77% in the prior survey. In Wave 36, approximately one-quarter (25%) indicated that their use of agency/temp staff increased more than 75% in 2021.
• While the use of volunteers remains relatively low, the ability to hire from outside of the seniors housing and care industry has grown from 11% to 25% since the Wave 33 survey.

• Offering rent concessions to new residents often helps drive increases in occupancy. Currently, about one-half (47%) of respondents are offering rent concessions to attract new residents. Of those offering rent concessions, three-quarters are offering rent discounts (76%) and more than two-thirds are offering free rent for a specific period of time (69%).  
• The chart below breaks out the 47% of responding organizations currently offering rent concessions by the size of the organization. Single site operators are significantly less likely to offer rent concessions than larger organizations. In Wave 36 only 14% of single-site providers were offering rent concessions.

• In Wave 36, one-half of respondents (52%) anticipate their organization’s operating margins will increase—up from one-third (35%) in the Wave 33 survey conducted in September. One-third (32%) expect margins to increase 1% to 5%, and a growing share of organizations anticipate growth between 6% and 10%.

Wave 36 Survey Demographics

• Responses were collected between December 6, 2021, and January 9, 2022 from owners and executives of 66 seniors housing and skilled nursing operators from across the nation. Owner/operators with 1 to 10 properties comprise roughly one-half (47%) of the sample. Operators with 11 to 25 and 26 properties or more make up the other half of the sample (31% and 26%, respectively).
• Approximately one-half of respondents are exclusively for-profit providers (54%), one-third operate not-for-profit seniors housing and care organizations (33%,) and 13% operate both.  
• Many respondents in the sample report operating combinations of property types. Across their entire portfolios of properties, 75% of the organizations operate seniors housing properties (IL, AL, MC), 28% operate nursing care properties, and 33% operate CCRCs (aka Life Plan Communities).

Owners and C-suite executives of seniors housing and care properties, please help us tell an accurate story about our industry’s performance.

The current survey is available and takes 5 minutes to complete. If you are an owner or C-suite executive of seniors housing and care and have not received an email invitation to take the survey, please contact Lana Peck at lpeck@nic.org to be added to the list of recipients.

NIC wishes to thank survey respondents for their valuable input and continuing support for this effort to bring clarity and create a comprehensive and honest narrative in the seniors housing and care space at a time when trends are continuing to change in our sector.

Senior Living investors and operators discuss innovative approaches.

The pandemic has been a stress test like no other for owners, operators, and lenders alike. Lessons have been learned. But what’s the best way to align incentives among the stakeholders for success going forward?

A panel discussion at the 2021 NIC Fall Conference explored the possibilities. The session, “Capital for Operations: Aligning Incentives,” was moderated by Torey Riso, managing director at Huron Consulting. He was joined on the panel by Brian Beckwith, CEO, Arcus Healthcare Partners; Mercedes Kerr, president, Belmont Village Senior Living; Fee Stubblefield, CEO & founder, The Springs Living; and Chris Taylor, managing director, Capital One Healthcare.

Considering the events of the last 20 months, Riso asked: “What kinds of incentive structures between operators and capital sources are now most sustainable to produce returns and best serve the interests of the resident populations?”

The panelists agreed that capital providers have been patient during the pandemic. “Lenders stepped up,” said Beckwith. They adjusted agreements as needed to keep operators afloat as they struggled with occupancy, cashflow, and labor issues.

Stubblefield echoed that sentiment. “We could not have gotten through this without our financial partners,” he said. “This was tough.”

Kerr noted that capital partners have been patient because the fundamentals of the business represent a great opportunity amid the growing demographic wave of older adults. Capital One’s Taylor said, “We’re in this for the long term.” He added that as a lender he wants to align with the right owners and operators.

Even so, the panelists acknowledged several issues currently confronting the industry, especially the rise in expenses and the shortage of labor. “The industry needs a coordinated effort around labor,” said Beckwith.

Management Fees in Flux

Riso asked if the standard 5% management fee is still the right number.

“The 5% fee is broken,” said Taylor. He explained that investors and operators are coming up with creative alternatives to provide care.

Beckwith said there are cases where the 5% formula might work if a particular facility is in an attractive location and does not need a lot of resources. But investors understand that the quality of the services provided is directly correlated to financial performance. Negotiating which party spends what amount on which resources means that the investor has to understand the operator and what they need to make the facility successful, according to Beckwith.

Stubblefield’s company doesn’t take fee managed assignments. Instead, the company co-invests with its capital providers or owns the properties outright. “We have to be vertically integrated all the way to build incentives,” he said.

Riso asked whether senior living projects can be valued like a cash flow business rather than as real estate.

“Investors in this space recognize this is operationally intensive,” said Kerr. She noted the importance of investing in operations. For example, the pandemic has resulted in innovations such as telemedicine which is improving efficiencies.

Stubblefield sees the pandemic as a “great pivot point.” Owners and operators have had to align their interests to reach the best long-term result for the community. But he added, “We have to make our case to capital providers. We have to point out what we need.”

Beckwith noted that the separation of the real estate from operations has provided an efficient source of capital that has been great for the industry. “It’s a challenge to make sure the operations side and real estate mesh,” he said.

The panelists foresee a lot of experimentation with capital structures to align operational and investment interests.

“There doesn’t have to be one answer,” said Kerr. Some structures provide an opportunity for the operator to share in the upside based on performance benchmarks. But those arrangements don’t work when faced with an unexpected event like a pandemic.

Kerr thinks senior living performance standards could evolve in a way similar to that of the hotel industry where an operator’s results are judged against the performance of its peers. “More data transparency and benchmarking might be an answer to the question of how to hold an operator accountable,” she said.

Beyond financial performance, there are other ways to create alignment among partners by sharing cultural or aspirational objectives, noted Kerr. “Parties driving toward a goal together is a great motivator,” she said.

Beckwith said that the industry is trying to figure out what works best. Compressed margins are impacting valuations, making it a balancing act to generate returns while allowing the operator to make the right decisions.

Capital providers can see the value of investing in operations to deliver the best product. But, Stubblefield observed: “Operators have to lead the way.”

2022 NIC Spring Conference: Care & Housing for Older Adults | March 23-March 25, Omni Dallas Hotel

As the sector enters a new era of delivering community and care to a growing -and aging- population of older adults, no other industry event offers the level of access to decision-makers, ideas, and connections that you need to be successful like you’ll find at the 2022 NIC Spring Conference.
Senior housing and care executives represent ~70% of attendees who will be convening in Dallas this March to explore new models of community and care, build strategic partnerships and business opportunities as they shape a new era.

Operators will be looking for efficiencies, labor solutions and innovation, while capital providers will be looking for deals. Healthcare and services providers will be looking for potential new partnerships or acquisition opportunities.

Not Yet Registered?

Act now to ensure you have a seat at the table! Register and view conference details to jump start your planning. Your registration confirmation email will provide details to reserve your hotel accommodations at the Dallas Omni. Register before the Early Bird deadline of January 26, to save! [Note: Registrations must be received by the NIC Registrar no later than January 26 at 11:59 PM ET to qualify for Early Bird savings.]

To review the professional categories for registration, please visit our rates and registration page.

Networking and Connections

This year’s Spring Conference offers an array of networking resources—designed to help attendees focus on what matters most to them—developing connections and new business partnerships to keep your business ahead of the curve.

First Time Attending a NIC Spring Conference? Jump right in!

This is your chance to network with fellow first-time attendees, meet NIC Leadership, and hear tips on how to make the most of your experience—before, during, and after the conference.

Prior to the conference, first-time attendees are invited to a webinar designed to help navigate the event and the conference’s mobile app, which gives attendees access to the Attendee Listing, the “who’s who” of industry leaders. The conference mobile app offers an array of helpful resources, including floor maps, speaker bios, and Meet-Up points to help get to your meetings on time.

At the conference, attendees are invited to join the First-time Attendee gathering to hear directly from and meet NIC senior staff and volunteer leaders.

Braindate^® – Another Efficient Way to Connect, Network, and Learn

Back by popular demand are Braindates^®, 1-on-1 or small group conversations that provide attendees additional opportunities to network and connect with peers and new acquaintances. Available beginning Tuesday, March 1, registered attendees will be able to download the Braindate^® app, where they can sign up to facilitate a discussion related to topics based on areas of expertise or interests and browse other Braindate^® discussions they’d like to participate in. Look for notifications from NIC soon.

Inform Your Strategy with Stand-Alone, Not-to-be-Missed Educational Sessions

The NIC Spring Conference educational sessions have been carefully curated to offer relevant, timely, and actionable programming—to help capital providers, operators, and their partners in care and services stay on top of where the industry is headed, and where their opportunities lie today, as they adjust and adapt to markets experiencing rapid change and disruption.

Stand-alone sessions span all three days of the conference, with formats including keynote and panel presentations, and more intimate facilitated deep dive and peer-to-peer small group discussions.

Featuring admired experts and respected business leaders, topics will include:

• Building Back Occupancy
• How to Increase NOI
• Policy and Macroeconomic Outlook
• Service Markets for Older Adults
• The Middle Market
• Equity and Debt Financing
• Active Adult
• Staffing and Labor

Check our 2022 NIC Spring Conference website frequently for program updates—including speaker announcements and exciting details regarding discussion formats. Make sure to sign up for emails and important notifications from NIC.

We’ll see YOU at “The NIC.”

March 23-March 25
Dallas Omni, Dallas, TX
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The Labor Department reported that the jobless rate fell 0.3 percentage point to 3.9% in December, down 2.8 percentage points from year-earlier levels. The jobless rate is now 0.4 percentage points above the pre-pandemic level of 3.5% seen in February 2020, and well below the 14.7% peak seen in April 2020.

The supply of labor as measured by the labor force rose by 168,000 in December, while household measure of employment rose by more than 651,000 in December. These factors pushed the jobless rate lower to 3.9%. This rate is below the Fed’s estimate of its longer-term unemployment equilibrium level.

Concerns about rising wage costs are supported by this report. Average hourly earnings for all employees on private nonfarm payrolls rose by $0.19 in December to $31.31, a gain of 4.7% from a year earlier.

The household survey data supports the Fed’s view that the labor market is at or close to maximum employment and will provide further evidence that a shift in monetary policy away from being accommodative to a more restrictive stance is appropriate. Indeed, at its most recent and final meeting of the year in December, the Fed changed course sharply as it shifted away from dovish policies of low interest rates and Quantitative Easing (QE) to support overall growth to one that is more hawkish to deliberately fight inflation by slowing its monthly bond buying program and raising interest rates. Reflecting this new tone, it is likely that the Fed will raise short-term interest rates in 2022, possibly three times and further in 2023. The Fed’s bond buying program will also “taper” much more quickly than initially announced, meaning that purchases could now end in February 2022 or sooner, thereby doing less to stimulate the economy which would theoretically and eventually slow price gains as demand wanes. The exact timing depends upon when officials judge the labor market is back at “maximum employment,” with Fed Chair Jerome Powell arguing that the economy has made “rapid progress” towards that goal. The December jobs report will add evidence that this goal has been achieved or is very close to being achieved.

Separately and from a different survey, the Labor Department reported that nonfarm payrolls rose by 199,000 in December 2021. The consensus had been for an increase of 447,000. This was a sharp slowdown from October when jobs increased by 648,000 (originally reported as 546,000) and from November when jobs grew by an upwardly revised 249,000 (originally reported as 210,000). On average, job growth averaged 537,000 in 2021. Nonfarm payrolls have now increased by 18.8 million since their pandemic trough in April 2020 but are still down by 3.6 million or 2.3% from their pre-pandemic level in February 2020.

The potential negative impact of the newly identified omicron variant on jobs is likely not reflected in the December data because the survey week occurred prior to the big surge in omicron-linked cases. But the data show that the labor market continues to be affected by the delta variant especially in the service sector. Indeed, leisure and hospitality payrolls edged up by a muted 54,000, following large gains of 200,000 per month earlier in the year.

Health care lost 3,100 jobs in December. And within health care, nursing and residential care facilities lost 6,100 jobs. Losses were offset by gains in residential mental health facilities. Jobs have been on the decline in nursing care since 2011.

The underemployment rate or the U-6 jobless rate was 7.3%, down from 7.7% in November 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 labor force participation rate was unchanged at 61.9% in December but remains 1.5 percentage points lower than in February 2020. The employment to population ratio increased by 0.1 percentage point to 59.5% in December but is 1.7 percentage points below its February 2020 level.