A “Now Hiring” sign hangs in the window of a hair salon in the Greater Boston town of Medford, Massachusetts, August 12, 2025.Brian Snyder | ReutersWage growth is doing something odd these days.Typically, wages grow at a faster clip each year for workers who switch jobs, compared to those who stay in their current role.That makes sense: Workers generally leave a job when they find something better for them, which often includes a higher salary, according to labor economists.But in 2025, the roles have reversed as workers, faced with a souring job market, shift from job-hopping to “job hugging” — that is, clinging to their current roles.Annual wage growth for so-called “job stayers” has eclipsed that of “job switchers” for the past six months, since February, according to data tracked by the Federal Reserve Bank of Atlanta.[embedded content]The margins aren’t huge: For example, in July, job stayers saw wages grow at a 4.1% annual pace, versus 4% for workers who switched jobs, according to the Atlanta Fed data.However, that sustained reversal points to an underlying weakness in the labor market, economists said.Since the late 1990s, a prolonged reversal in wage growth trends for job “switchers” versus “stayers” has only happened in periods around the Great Recession and the dot-com bust in the early 2000s, the Atlanta Fed data shows.The last time a drawn-out reversal occurred was in and immediately following the Great Recession, during an 18-month period from February 2009 to July 2010, according to the data.”We only tend to see it around other times when the labor market has been weak,” said Erica Groshen, a senior economics advisor at the Cornell University School of Industrial and Labor Relations and former commissioner of the U.S. Bureau of Labor Statistics from 2013 to 2017.The Atlanta Fed computes a three-month moving average of median hourly wages using data from the Current Population Survey, reported by the U.S. Census Bureau and Bureau of Labor Statistics.That said, aggregate data on the labor market suggests it’s still in “pretty strong” shape, Groshen said.’Workers have lost some bargaining power’But it has gradually cooled from a torrid pace in recent years.Job openings had ballooned to historic highs in 2021 and 2022 as the U.S. economy awoke from its pandemic-era hibernation. …
