(NewsNation) — The golden era of job-hopping for big raises is over, yet another sign the labor market is cooling.
Those who switched jobs increased their wages by 4.8% in January and February, according to the Federal Reserve Bank of Atlanta. Meanwhile, workers who stayed in their roles received only slightly less at 4.6%.
That’s the smallest gap between the two groups in a decade and marks a significant change from the post-COVID hiring boom when job-hoppers saw their wages rise much faster.
Is the US headed for a recession? 4 warning signs to keep an eye on
Over the past couple of years, changing jobs was one of the best ways to get a solid raise, but as employers tighten their budgets and hire at a slower pace, massive pay boosts are harder to come by.
At the start of 2023, workers who switched jobs saw an average salary bump of 7.7%, compared to 5.5% for those who stayed put, according to the Atlanta Fed’s Wage Growth Tracker.
Nowadays, job seekers are finding employers have little wiggle room when it comes to salary negotiations.
One job hunter, Josh Vogel, told The Wall Street Journal he recently accepted an offer for $50,000 less than he was making at his previous role after being laid off in October.
“No one is paying what they used to,” Vogel said. “If you don’t like it, there’s 50 people behind you they’re going to call right afterward.”
Slowing wage growth for job switchers is a sign companies aren’t competing as fiercely to attract new talent. It’s also a signal workers are becoming more risk-averse, opting to stay put amid brewing economic uncertainty.
In a recent Harris Poll survey for Bloomberg News, more than 70% of Americans said it’s difficult to find a better job than their current one, and 75% said employers have more leverage in the job market than employees do.
What’s going on in the job market?
U.S. employers added 151,000 jobs in February, an indication the job market is slowing but stable for now. Job growth has remained especially strong in the health care and social assistance sector.
The number of Americans filing for unemployment benefits also suggests a relatively healthy labor market and came in below analysts’ forecasts to start the month. The unemployment rate rose slightly to 4.1% in February, but that’s still low by historical standards.
Other data paints a more concerning picture.
A recent report from outplacement firm Challenger, Gray and Christmas found that U.S.-based employers cut more jobs last month than in any February since 2009. Government job cuts driven by President Donald Trump’s Department of Government Efficiency efforts were one of the big reasons why.
The number of Americans working multiple jobs has also ticked up, reaching an all-time high of nearly 8.9 million in February, according to the Bureau of Labor Statistics.
Trump’s on-again, off-again tariffs have added to the economic uncertainty, sending stocks lower and rattling consumer confidence.
The president’s trade agenda has pushed prominent economists like former Treasury Secretary Larry Summers to sound the alarm about a potential recession.
“I am convinced there is nearly a 50 percent chance of recession, and maybe even a far greater risk of recession, unless the current policy approach of tariff threats lurching is altered,” Summers wrote in a recent post on X.
The Federal Reserve is expected to hold interest rates steady at its meeting this week as officials wait for more data about where the U.S. economy is headed.
