Job switchers are losing their edge

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There are a lot of ways to measure the ever changing labor market.?

Just this week alone gave us an embarrassment of data riches: a survey about hiring and quitting (JOLTS ), payroll company ADP’s data , Challenger’s job cuts data , initial jobless claims , and the September jobs report.

But our chart of the week might be the most novel way to slice and dice this labor market pictures, and shows some of the pandemic’s biggest winners losing their edge.?

Data from ADP published this week showed exactly how wage growth between people who stayed at jobs changed versus those who sought new employment has narrowed considerably.

In the heady days of the summer of 2022 the labor crunch drove companies to offer huge bounties to convince people to jump ship. This resulted in, on average, job switchers seeing double the annual pay increase over those who elected to be job stayers.

Obviously, switching jobs has always been a way to get more money. That’s just the cost a company pays for getting someone to gamble on a new role in a new place.

And this premium still exists.

But now, it seems that after a suite of rate hikes we find ourselves regressed back to a more normal historical gap between the switchers and stayers.

Of course, the big question is where these dynamics in the job market go next. And the answer, at least eventually, is to whatever level helps get inflation down to 2%.?

— Ethan Wolff-Mann , Senior Editor