Job Switchers See 10% Jump in Wages

ADP’s latest employment report shows a jump in raises for people switching jobs.

While year-over-year pay increases last month for people who stayed at their jobs were flat after months of continued slowing, gains for people changing jobs jumped “dramatically” to 10%, the second straight monthly increase, according to a Wednesday (April 3) press release.

“March was surprising not just for the pay gains, but the sectors that recorded them,” said Nela Richardson, ADP’s chief economist, in the release. “The three biggest increases for job-changers were in construction, financial services and manufacturing. Inflation has been cooling, but our data shows pay is heating up in both goods and services.”

Meanwhile, private employers added 184,000 jobs in March, the biggest increase since July, the release said. Job gains were robust throughout industries, particularly in the leisure and hospitality space (which added 63,000 jobs) and construction (33,000).

The one exception came from the professional services field, which saw a drop in hiring to the tune of 8,000 positions, per the release.

The report comes on the heels of the latest Personal Consumption Expenditures price index from the Bureau of Economic Analysis, which showed that consumer spending in February, as measured month on month, was up 0.8%, while personal income was up 0.3% over the same time, while prices were up 0.3% overall, including food and energy costs.

Meanwhile, the personal saving rate in the February data was at 3.6%, falling from 4.1% seen in January and down from recent peaks in the past year of roughly 5%. This suggests consumers and households are drawing down their savings to pay for necessary goods and services.

PYMNTS Intelligence data found that 15% of consumers said debt accumulation was a factor in the pressure on their savings, as they dipped into those accounts to help manage their debt. More than three-quarters of consumers said they had used much of their savings to fund a major expenditure at least once.

“There’s a limited lifeline for the savings cash cushion, as consumers said they deplete, on average, 67% of all available savings, with the average consumer facing such depletions once every four years,” PYMNTS wrote last month. “Among paycheck-to-paycheck consumers, the average recurrence drops to once every 2.5 years. Given the fact that most of us — at more than 60% — live paycheck to paycheck, it follows then that most of us are feeling the pinch on savings.”

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