Friday’s Jobs Report: Reading the Tea Leaves in Glassdoor Job Postings
After last month’s roaring February BLS jobs report, most economists expect another strong month of job gains in March. How much longer can this robust pace continue? Here’s what we’ll be watching for on Friday:
- +205,000 new jobs added to nonfarm payrolls in March;
- Unemployment rate down slightly to 4.0 percent;
- Average hourly earnings up 2.5 percent from one year ago;
- Labor force participation rate steady at 63 percent.
The labor market is off to a booming start in 2018. After months of slowing job gains, the economy added 313,000 new jobs in February — a remarkable pace for an economy near full employment and almost nine years into an economic expansion.
What’s next for jobs and wages? One source of clues comes from real-time jobs and salary data from Glassdoor. BLS data are backward-looking and can lag months behind, but data from online job sites like Glassdoor can sample the U.S. labor market in real time — sometimes helping us spot trends before they show up in other figures.
Let’s look at what two Glassdoor data sources say about the job market today: online job postings and salaries.
Signals from Job Postings
One leading source for job openings in the U.S. comes from the BLS JOLTS survey. It’s a sample of about 16,000 businesses in America. On the last business day of each month, it asks companies how many jobs they have open and are ready to fill. Because it’s a manual survey, it takes months to compile responses. That means when JOLTS data finally see the light of day, they’re usually two to three months old — making them a poor measure of what’s happening today in hiring.
By contrast, online job postings from sites like Glassdoor count open jobs in America from the bottom up. As a “jobs aggregator” we collect, in an automated way, every job listing we can find anywhere online so that we can show the most relevant jobs to job seekers on Glassdoor. We gather jobs from company websites, job boards, applicant tracking systems and many other sources. The result is a huge database of job listings that closely tracks BLS job openings — allowing us to see the hiring landscape in real time and which we won’t learn from BLS JOLTS for months.
In the figure below, we show BLS job openings side-by-side with Glassdoor online job postings since June 2016. The blue line shows non-seasonally adjusted open jobs from BLS — January 2018 is the latest month available. The green line shows online job listings from Glassdoor, which are a snapshot of unique open jobs in the U.S. as of the last Monday of each month — similar to BLS’s survey period.
Overall, the two series closely track each other. The correlation between them is about +0.55 and the ratio of Glassdoor job postings to BLS job openings averages 0.9. In other words, this back-of-the-envelope estimate suggests Glassdoor’s online job postings capture somewhere around 90 percent of the roughly 6 million open jobs in the U.S. today.
What does this tell us about the labor market today? Although JOLTS data for March won’t be released for months, Glassdoor’s database shows us job listings rose sharply last month. Because job growth and openings tend to move closely together, we should expect another strong month of hiring in March. For that reason, we’re expecting to see 205,000 new jobs added to nonfarm payrolls in Friday’s BLS report.
What’s Next for Pay?
Another measure of the labor market from Glassdoor comes from our salary data. Each month more than 50 million unique visitors use Glassdoor. While they’re here looking for jobs, we ask users to submit an anonymous salary to help others learn about fair pay and benefits. Over the years we’ve collected many millions of salaries this way.
In 2016, we transformed that massive database of salaries into a monthly indicator of wage growth around the country — a product we call the Local Pay Reports. What can these data tell us about Friday’s BLS jobs report?
In the figure below, we show our estimates of U.S. median base pay for full-time workers since January 2016, based on Glassdoor data. The green line shows annual pay and the blue line shows year-over-year wage growth. The takeaway is that despite today’s strong labor market, wage growth isn’t likely to accelerate much in March. We’ve seen slow pay growth in our data for months, with U.S. median pay rising just 1 percent year-over-year in March.
Based on these data, despite today’s very low 4.1 percent unemployment rate, we expect to see continued moderate wage gains on Friday. Our estimate for BLS average hourly earnings is for a 2.5 percent rise from a year ago in March.
Although overall pay is growing slowly, we’re seeing pockets of fast wage gains for in-demand jobs in health care, tech, and e-commerce. As more occupations face labor shortages in 2018, we expect wage growth to accelerate later this year. However, as of today, it’s hard to find evidence in Glassdoor’s data that average wage growth accelerated much last month — something we’ll be watching closely in the coming year.
To speak with Dr. Andrew Chamberlain about this month’s jobs report or labor market trends, contact pr [at] glassdoor [dot] com. For the latest economics and labor market updates, subscribe to email alerts here and follow @adchamberlain.