MBA Chart of the Week: Private Job Openings/Hires; Growth in Hourly Earnings

Source:  Bureau of Labor Statistics.  

Data from the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey shows job openings have exceeded the number of hires for nine of the past 10 months; this has been a trend for the past two years.  

Looking back at historical data, such a trend is unprecedented, as openings have always been lower than number of hires. Although wage growth seems to be accelerating slowly, employers are likely to start increasing pay to attract and retain the required talent especially with such a large excess of job openings.  

The year over year change in average hourly earnings at 2.7 percent over the past three months shows a decent upward movement over the past six months. This matches other indicators of employment costs and compensation from BLS and the National Federation of Independent Business. In addition to increasing wages, economic growth, consumer confidence and favorable demographic trends continue to provide support for housing demand, therefore the MBA forecast calls for a 6 percent increase in purchase originations in 2018 compared to 2017.      

Lack of housing inventory has been the focal point of our outlook recently, but it is also important to remember that wage and income growth have been approximately half of the growth in home prices. We are however, expecting to see an increase in wage growth in the near future, and a deceleration in home prices over time as additional supply comes on line.  

(Joel Kan is associate vice president of industry surveys and forecasting with MBA; he can be reached at jkan@mba.org).