Workers hoping to switch jobs for a pay increase are in for some unpleasant news.
That’s according to the latest employment report from ADP, released Wednesday (Dec. 6) and showing that the premium for changing jobs was at a three-year low last month, while overall pay growth continued to slow.
Overall, the report said, private sector employers added 103,000 jobs in November — down from 106,000 the prior month — with annual pay up 5.6% year over year.
The sectors adding the most jobs included health and education (44,000) and trade/transportation/utilities (55,000). Industries that lost jobs include manufacturing (15,000) and leisure/hospitality (7,000).
“Restaurants and hotels were the biggest job creators during the post-pandemic recovery,” said Nela Richardson, chief economist, ADP. “But that boost is behind us, and the return to trend in leisure and hospitality suggests the economy as a whole will see more moderate hiring and wage growth in 2024.”
People who stayed with their jobs saw a 5.6% increase, which ADP says is the slowest rate of gains in more than two years. But people who changed jobs also saw slowing growth in pay, up 8.3%, the smallest increase since June 2021.
“The premium for switching jobs is at its smallest in three years of data,” the report said.
Research by PYMNTS Intelligence has shown that 16% of American workers who say their salary doesn’t meet their expectations hope to change jobs to remedy that issue.
As noted here recently, two years of inflation levels outstripping wages have weakened U.S. households and left consumers in a fight to maintain purchasing power and financial stability.
“Many individuals have depleted a significant portion of their savings to keep up with everyday expenses,” the report said.
“Furthermore, consumers have started cutting back on indulgent expenses such as travel or leisure events, and are exhibiting more conservative behavior in essential spending, seeking deals and discounts or swapping their usual retail stores for cheaper alternatives. The lower-income segment is leading this trend toward more selective and rational consumption.”
ADP’s release comes one day after the U.S. Labor Department released new data showing job openings reaching their lowest level in more than two years.
The department’s Job Openings and Labor Turnover Survey (JOLTS) found 1.34 vacancies for every unemployed person in October, the lowest level since August 2021 and down from 1.47 in September. The survey showed that, as of the last business day in October, the number of job openings fell to 8.7 million, a drop of 617,000, the lowest level since March 2021.