Mortgage banking firms cut 7,200 jobs in November, one of the biggest monthly layoffs of the year. Meanwhile, mortgage brokerage firms posted 2,300 monthly job losses, down to 127,400 full-time employed brokers in November.
“November data showed that there were still more than 10 million job openings in the economy,” Fratantoni added. “The consistent slowing in the pace of wage growth may reflect employer caution as other data clearly signal a weaker economy in 2023.
“Slower wage growth should also be reflected in further reductions in the rate of inflation, as businesses will have less cause to push prices up to pay for higher wages. Ultimately, this should result in inflation dropping back to the Federal Reserve’s 2% target.”
Fratantoni clarified that the December jobs report will not lead the Fed to quickly change course with its aggressive monetary policy tightening.
“We expect a 25-basis-point hike at the next meeting,” he said. “Mortgage rates are off their highs from last year, and we expect them to trend down over the course of 2023.”