Wage growth drops for job switchers amid labor market cooldown

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Labor Market News

Nela Richardson,Pay Increase

The gap between wage growth for workers who changed jobs and those who stayed in theirs narrowed further in July.

The pay gap between job stayers and job changers narrowed in July in the latest sign that the US labor market is cooling.from ADP released Wednesday showed that the median year-over-year pay increase for job switchers fell to 7.2% in July, down from the 7.7% increase seen in June. Meanwhile, pay for workers who stay in the same job rose 4.8%, its slowest rate of increase since July 2021.

Other data has also pointed to a cooling labor market this week. ADP's Employment report showed that 122,000 private payroll jobs were added in July, below economists' expectations of 150,000. Meanwhile, the latest Job Openings and Labor Turnover Survey quits —which are seen as a sign of confidence among workers they will find a new job — fell to 3.28 million in June, the lowest level since November 2020.

"Wages and pay are the bridge from the labor market to the inflation data, and we are certain, after three years of looking at these numbers, that if inflation picks up — and no one thinks that's likely right now — it won't be because of labor," Richardson said. "We're seeing continued steady declines in wage growth that fits with the overall inflation picture also cooling, along with the labor market.

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