The US labor market posted slower growth in wages in the third quarter, according to the ADP Workforce Vitality Report, released today. The report tracks a set of workers to determine wage growth among those who are consistently employed. This set of workers falls into two categories: job holders (those who stay in the same job) and job switchers (those who change jobs).

Wage growth for job holders, overall, remained 4.4% year over year in the third quarter, unchanged from the second quarter. Job switchers’ wage growth edged down to 3.3% in the third quarter from 3.4% in the second quarter. On average, job holders’ hourly wage levels are $10 more than that of job switchers.

“Despite the deceleration we've been experiencing in overall wage growth, we continue to see evidence of the strengthening labor market when you look at specific areas,” said Ahu Yildirmaz, co-head of the ADP Research Institute. “As employers strive to retain skilled workers, we see wage increases for full-time job holders in all sectors. Most notable are the information and construction industries.”

Workers ages 24 and younger posted the most robust wage growth among job holders, up 8.8%.

Considering wages across industries, the service sector proved to be more attractive for job switchers than the goods sector. Across all service industries, job switchers’ wage growth exceeded that of job holders. Full-time workers who switched jobs to the leisure and hospitality industry gained the most with a 6.9% increase in wages. Looking at those who stayed in their jobs, the information industry led the way in wage growth in the third quarter, with job holders’ wages increasing by 5.1%.

Looking at wage growth among only full-time workers, job switchers’ wages increased by an average of 4.9% year over year and job holders’ wages rose by an average of 4.3%.

Wage growth for full-time job holders and job switchers in the third quarter of 2017:

• All: Holders 4.3%; switchers 4.9%
• Manufacturing: Holders 4.2%; switchers 3.3%
• Construction: Holders 4.9%; switchers 5.8%
• Resources and mining: Holders 4.7%; switchers -1.5%
• Finance and real estate: Holders 4.5%; switchers 4.7%
• Information: Holders 5.1%; switchers 6.1%
• Professional and business services: Holders 4.4%; switchers 5.6%
• Leisure and hospitality: Holders 4.8%; switchers 6.9%
• Education and health services: Holders 3.9%; switchers 6.2%
• Trade, transportation and utilities: Holders 4.3%; switchers 4.9%

The ADP Workforce Vitality Report was developed by the ADP Research Institute in collaboration with Moody’s Analytics.