The 'Great Hesitation': Fewer Americans are switching jobs lately as labor market cools
Crossmark Global Investments chief market strategist Victoria Fernandez analyzes the state of the consumer ahead of the June FOMC meeting on 'Making Money.'
Tens of millions of Americans switched jobs during the past couple of years, lured by big pay raises and abundant job opportunities – a trend that economists dubbed the «Great Resignation.»
But that may finally be coming to an end as the labor market settles into what Bank of America economists are now calling the «Great Hesitation.»
Job hoppers appear to be taking a pause, according to a new report published by the Bank of America Institute that is based on internal data. The number of workers moving from job to job is about 3% on average as of May, a notable drop from mid-2022, when it nearly hit 3.75%.
WEALTHY AMERICANS ARE ANXIOUS ABOUT MAKING ENDS MEET
An unprecedented number of workers left their jobs in 2021 and 2022 as the extremely tight labor market allowed many individuals to seek better wages, working conditions and hours.
Signage for a job fair is seen on 5th Ave. in Manhattan, New York City, on Sept. 3, 2021. (Reuters/Andrew Kelly / Reuters Photos)
Switching jobs proved to be a lucrative move for many Americans during that time period. Workers who changed jobs in July 2022 – at the height of the Great Resignation – received an 8.5% annual pay raise, which compares to the 6.7% pay raise seen by those who stayed in the same position, according to data published by the Federal Reserve Bank of Atlanta.
That rapid wage growth was a key driver of high inflation in 2022 and 2023.
However, there are signs that job switchers are receiving smaller pay bumps from their new employers than before. When the Great Resignation was in «full swing,» the median pay
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