Economist Justin Wolfers dropped a number on the Prof G Markets podcast that should reorganize how you think about the 2026 economy. Since Trump took office, healthcare and social services has added roughly 901,000 jobs, while every other part of the economy has actually lost jobs on net. One sector hiring. Everything else shedding.
Before we mortgage the house on hospital REITs, Wolfers offered an honest caveat. He warned the finding may be “somewhat less relevant than it sounds” because overall job creation is naturally low thanks to weak population growth: “The closer you are to the whole not growing very much, the more likely it is you’ll end up in a world in which one sector’s doing all the positive and everything else is a negative.” In other words, slow-growth arithmetic flatters whichever sector happens to be expanding.
Still, the labor data is real. Total nonfarm payrolls reached 159,001 thousand in May 2026, with unemployment steady at 4.3%. I have been reading every jobs report for the better part of a decade, and the divergence between healthcare and everything else is the most lopsided I can remember outside of a recession.
Why Wall Street Hated the News
Wolfers explained the paradox simply: investors are playing “the game of Federal Reserve.” Strong jobs mean the Fed has no reason to rescue the labor market with rate cuts, while core PCE keeps grinding higher (the index hit 129.63 in April). Polymarket now prices zero rate cuts in 2026 at roughly 80% probability, with the funds rate parked at 3.75% since January and the 10-year Treasury at 4.56%.
That means we’ll likely continue a cycle of more job growth in healthcare while rates remain elevated. This impacts two primary sectors.
Where the Hiring Is Showing Up in Stocks
UnitedHealth Group (NYSE:UNH | UNH Price Prediction) just posted Q1 2026 adjusted EPS of $7.23 against a $6.61 estimate, with the medical cost ratio tightening 90 basis points to 83.9%. The stock is up 26% year to date.
Humana (NYSE:HUM) is the comeback story, up 42% YTD despite a brutal Star Ratings headwind that crushed FY2026 adjusted EPS guidance to at least $9.00 from $17.14 in 2025. Individual Medicare Advantage membership is up roughly 22% year to date. CVS Health (NYSE:CVS) raised FY2026 adjusted EPS guidance to $7.30 to $7.50 after Aetna’s medical benefit ratio improved to 84.6% from 87.3%.
The Other Side: Rates Stay High With Financial Tailwinds
JPMorgan Chase (NYSE:JPM) just reported Q1 2026 net income of $16.49 billion with markets revenue at a record $11.60 billion. Jamie Dimon called the economy “resilient” while flagging risks ranging from trade uncertainty to elevated asset prices.
Realty Income (NYSE:O) is up 11% YTD and yields over 5%, with Q1 AFFO per share growing 6.6% and investment volume guidance raised to $9.5 billion at 7.1% cash yields. Sumit Roy is deploying capital as if rates will stay where they are, which Polymarket says is the right bet.
The Frame for Your Portfolio
Wolfers’ caveat matters, but the investing implication holds either way. If you believe the labor market keeps printing healthcare jobs while the Fed stays parked, the defensive sleeve with real demand (the insurers and pharmacy chains serving an aging population) makes sense, the bank earning a fat net interest margin makes sense, and a net-lease REIT that already underwrote 7%+ yields makes sense. The next signal to watch is the June 16 to 17 FOMC meeting and the next core PCE report. If inflation reaccelerates, the conversation shifts from “no cuts” to “possible hikes,” and the math on every dividend stock changes overnight.
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