Wage growth keeps slowing for job switchers as US labor market cools off

The pay gap between job stayers and job changers narrowed in May in the latest sign that the US labor market is cooling from a hot start to 2024.

New data from ADP released Wednesday showed that the median year-over-year pay increase for job switchers fell to 7.8% in May, from a recent spike of 8.3% in March and 8% in April. The gap between pay gains for job changers and those of job stayers, which grew at a 5% pace in May, is at its lowest level since February and a far cry from 2022-2023 levels.

“We’ve seen that people’s willingness to jump from job to job has really declined over the last two years,” ADP chief economist Nela Richardson said on a conference call with reporters Wednesday morning.

Richardson noted that the trend of fewer people leaving their jobs for a big pay bump isn’t new, as she and other economists have been tracking the shift from the “Great Resignation” to the “Great Stay.” But recently there have been other changes. Companies are focusing more on retaining and training workers rather than recruiting, and consequently, prospective workers are finding it harder to land new jobs.


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