The US labor market maintained modest growth in wages in the fourth 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 and job switchers. Job holders are those who stay in the same job, and job switchers are those who change jobs.

Wage growth for job holders, overall, rose slightly to 4.4% year over year in the fourth quarter from 4.3% in the third quarter. Job switchers’ wage growth also edged up to 3.7% in the fourth quarter from 3.6% in the third quarter. On average, job holders’ hourly wage levels are $10 more than that of job switchers.

“Employees in the leisure and hospitality industry continued to experience significant wage increases in the fourth quarter of 2016,” said Ahu Yildirmaz, co-head of the ADP Research Institute. “The leisure and hospitality industry was also among the top three industries for employment growth at 2.6%.”

Workers ages 24 and younger posted the most robust wage growth among job holders, up 8.6%.

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. Much like in the third quarter, leisure and hospitality continued to lead the way in the fourth quarter where job holders’ wages increased by 5.2%. Full-time workers who switched leisure and hospitality jobs gained the most with a 7.3% increase in wages.

Looking at wage growth among only full-time workers, job switchers increased wages by an average of 5.1% and job holders increased wages by an average of 4.3%. 

Wage growth for full-time job holders and job switchers in the fourth quarter of 2016:

• All: Holders 4.3%; switchers 5.1%
• Manufacturing: Holders 4.0%; switchers 3.1%
• Construction: Holders 4.8%; switchers 5.2%
• Resources and mining: Holders 0.9%; switchers -8.2%
• Finance and real estate: Holders 4.6%; switchers 5.4%
• Information: Holders 5.1%; switchers 6.7%
• Professional and business services: Holders 4.5%; switchers 6.3%
• Leisure and hospitality: Holders 5.2%; switchers 7.3%
• Education and health services: Holders 3.9%; switchers 6.3%
• Trade, transportation and utilities: Holders 4.1%; switchers 3.6%

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