Wage growth is showing unusual patterns in 2025, according to CNBC. Normally, people who switch jobs see their wages grow faster than those who stay put, which makes sense since job-switchers usually move for better pay. But this year, things have flipped. Indeed, with fewer job openings and more uncertainty, many workers are job-hugging, which means they are holding on to their current roles instead of job-hopping. For six straight months, starting in February, people who stayed in their jobs have seen slightly higher wage increases than those who changed jobs, according to the Federal Reserve Bank of Atlanta.
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While the difference is small (4.1% versus 4%), it’s still a signal that the job market may be weakening. Historically, such reversals in wage growth trends have only happened during economic downturns, like the dot-com bust and the Great Recession. In fact, Erica Groshen, a senior economics advisor at Cornell and former head of the Bureau of Labor Statistics, noted that these patterns usually appear when the labor market is soft. Although overall data still points to a relatively strong job market, things have cooled down since the hiring surge in 2021 and 2022, when job openings were at record highs and quitting for better pay was common.
Now, with high interest rates and economic concerns, hiring has slowed to the lowest pace in over a decade, and the quits rate has dropped to around 2%, the lowest level since early 2016 (excluding the early pandemic). This shift has reduced workers’ bargaining power, especially for those forced to change jobs. In addition, long-term unemployment lasting six months or more is rising, with 25% of jobless individuals falling into that category in July.
Is SPY Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on the SPDR S&P 500 ETF Trust (SPY) based on 418 Buys, 80 Holds, and six Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average SPY price target of $719.03 per share implies 11.4% upside potential.
