While much progress has been made on the unemployment front, the crucial question for the real estate industry is when we’ll see some wage growth. As regular readers of Lou Barnes’ Inman News column are aware, much of the continuing weakness in home sales is probably less about rising home prices than stagnant wages.
But having crunched numbers collected by human resources management firm ADP, Moody’s Analytics Chief Economist Mark Zandi thinks wage growth may already be picking up — the Bureau of Labor Statistics just hasn’t picked up on it yet.
“The hourly wage rate for job holders is the most telling,” Zandi writes. “It is up 4.5 percent from a year ago in the third quarter, a strong and steady acceleration from its low two years ago. The acceleration in hourly wage growth occurs across the board, although it is up most for younger workers, those with one to five years on the job and at lower pay levels, and those who work at small companies. Wage gains have also picked up most in financial services and construction in the West and South.”
That could be good news for housing — if it doesn’t also spook stock market investors into running for the exits on fears that the Federal Reserve will have to start tightening to avoid inflationary pressure. Source: economy.com.