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Fewer Americans are switching to new jobs, NY Fed survey shows

Workers are less satisfied with their wages as inflation erodes buying power

The number of Americans quitting their jobs for a different one declined in July, according to a Federal Reserve Bank of New York survey published Monday, a sign the so-called Great Resignation is slowing down. 

The rate of transitioning to a different employer declined to 4.1% in July, compared with 5.9% the same month one year ago, according to the New York Federal Reserve’s Consumer Expectations Labor Market survey. The decline was most pronounced for women and for respondents with a household income of less than $60,000. 

“The average expected likelihood of receiving at least one job offer in the next four months retreated slightly to 21.1% from 21.6% in July 2021, remaining below pre-pandemic levels,” the survey said. 

Despite that, workers are still searching for new gigs: 24.7% of individuals reported looking for a new job over the past month, which is up from 24% one year ago. The increase was driven by respondents under the age of 45 who hold a college degree. 

What’s more, about 21.1% of individuals said they have received at least one job offer over the past four months – up from 18.7% last July. The average full-time wage offer has grown to $60,764 from $58,469 one year ago. 

Workers are growing less satisfied with their pay, however, with wage compensation satisfaction retreating from 58.2% to 56.9% in July. 

For months, newly empowered workers have been quitting their jobs in favor of better wages, working conditions, and hours as businesses lure new workers with higher salaries – a trend dubbed the “Great Resignation.” As a result, Americans’ incomes are rising across the board as employers have ramped up hiring to offset the losses or try to out-compete other businesses for workers.

The incredibly tight labor market is in part fueling record-high inflation, as millions of workers are seeing the largest pay gains in years – the result of companies competing with one another for a limited number of employees. Earnings rose 5.2% in July from the previous year, much higher than the pre-pandemic average of 3%, according to the Labor Department. On a monthly basis, wages rose 0.5%, coming in hotter than economists expected.

But inflation is rapidly eroding those gains.  

The Labor Department reported earlier this month that average hourly earnings for all employees actually declined 3% in July from the same month a year ago when factoring in the impact of rising consumer prices. On a monthly basis, average hourly earnings dropped 0.6% last month, when accounting for the inflation spike. 

As a result, workers are increasingly anticipating higher wages when they accept a new job. 

“Conditional on expecting an offer, the average expected annual salary of job offers in the next four months increased to $60,310 from $57,206 in July 2021, reaching the second highest reading of the series,” the survey said. “The highest reading was recorded in March 2021.”

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