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Wages rise at annual rate of 3.4%, job-switching slows: ADP

January 24 2019

Wages for US workers increased at an annual rate 3.4% in December, raising the average wage level by 93 cents to $28.06 an hour, according to the fourth-quarter ADP Workforce Vitality Report, released Wednesday. Wages rose last December at an annual rate of 3.1%.

Among industries, information continued to lead the way for both wage level and wage growth with a wage level of $42.60 and wage growth of 5.1%. The information industry category includes Internet firms, software companies, publishers and broadcasters.

The report also found 20.5% of US employees successfully switched firms in the last year, highlighting an overall slowdown in job switching. In the same time period last year, 21.2% switch firms.

“As the labor market sits at full employment, we continue to see an overall slowdown in job switching across the majority of industries,” said Ahu Yildirmaz, co-head of the ADP Research Institute. “One industry defying the market trend is finance, which has experienced a steady uptick in job switching. This acceleration is driven primarily by younger workers.”

Wage growth for all job switchers gradually accelerated during this same time period, currently at 5.4%.

Job switching in the finance industry is accelerating, with more than 18.6% of workers in the industry switching firms in the last year; wage growth for job switchers in finance is also picking up, currently at 6.3%.

Year-over-year wage growth for full-time job holders and job switchers in December 2018:

  • All: Holders 4.7%; switchers 5.4%
  • Construction: Holders 5.0%; switchers 9.0%
  • Manufacturing: Holders 4.7%; switchers 5.7%
  • Resources and mining: Holders 4.7%; switchers 1.7%
  • Information: Holders 5.6%; switchers 10.6%
  • Finance and real estate: Holders 4.7%; switchers 6.3%
  • Professional and business services: Holders 4.0%; switchers 8.2%
  • Education and health services: Holders 4.4%; switchers 3.5%
  • Leisure and hospitality: Holders 5.4%; switchers -1.7%
  • Trade, transportation and utilities: Holders 5.3%; switchers 3.8%

The ADP Workforce Vitality Report used payroll data derived from a sample of approximately 250,000 companies and 18 million employees each month, which accounts for about 15% of all US private-sector employees.

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