Pay has been growing at a relatively steady pace for both job-stayers and job-changers for several months. But this data tracks only two subsets of the working population.
If we zoom out for a bigger picture, we see that pay for new hires—that expansive group of people who are brand new to a particular employer—has been stagnant for more than a year. When it comes to pay, new hires are in a rut.
New hires are people who join an employer for the first time. Over the last five years, they’ve comprised, on average, 4 percent of the total workforce, according to ADP payroll data.
However, the share of new hires varies dramatically by industry. Leisure and hospitality and education and healthcare, two sectors with high turnover, tend to have large shares of new hires. Construction and other sectors with smaller employers and outsized skill requirements tend to have smaller shares of new hires.
In July, new hires made up 3.6 percent of workers at private employers in the United States, less than the five-year average of 4 percent. The share of new hires as a percent of all active employees on clients’ payroll peaked in 2022, during the pandemic recovery and great resignation, at a monthly average of 4.6 percent. But outside of the pandemic period, new hires have made up a remarkably consistent share of employees across super sectors.
Share of new hires, by sector
| Sector | Share of employees who are new hires |
| Information | 2% |
| Construction | 4% |
| Other services | 4% |
| Natural resources | 4% |
| Financial activities | 5% |
| Manufacturing | 10% |
| Education and health | 15% |
| Leisure and hospitality | 15% |
| Trade, transportation, and utilities | 19% |
| Professional business services | 24% |
While the share of new hires has remained quite stable, pay growth for these workers has varied a lot. In July 2024, median hourly pay for new hires increased by a robust 5.9 percent from the previous year, from $17 an hour to $18 an hour.
Since then, however, hourly pay for new hires has barely budged, remaining unchanged at $18 in 12 of the past 13 months. The exception was in September 2024, when it edged down 10 cents to $17.90 before returning to the $18 high-water mark in October
For comparison, while year-over-year pay for new hires was unchanged in July, it was up 7 percent for a particular subset of new hires that ADP Research calls job-changers. These are individual workers we can observe ADP Research over time, in both their old and new jobs.
For job-stayers—that group of workers who are in the same job they held 12 months earlier, pay was up 4.4 percent, still better than pay for new hires.
New-hire pay also varies significantly by industry. In 7 of 10 super sectors we track, pay for new hires has fallen.
Information had the biggest deceleration, with pay growth going from 5.1 percent year-over-year in July 2024 to a net negative in July 2025, when it fell 10.3 percent.
In fact, median pay for new hires in information has been negative for eight consecutive months, the strongest deceleration of the industries we track.
Pay in construction also fell for the first time, going down 1.5 percent year over year in July 2025. Compare that to 5.9 percent year-over-year growth just a year earlier.
However, in business-to-business industries such as financial activities and professional business services, pay for new hires is rising. In finance, it was up 5.3 percent between July 2024 and July 2025, an acceleration from the 1.3 percent increase posted during the previous 12-month period. In professional business services, pay for new hires was up 5.3 percent year-over-year in July 2025, compared to just 0.3 percent in July 2024.
My take
A slowdown in hiring momentum affects not only job creation but also pay growth. The job slowdown, coupled with a year-long stagnation in new hire pay, are signals of a weakening labor market.
The week ahead
Tuesday: Today’s read on July consumer prices from the Bureau of Labor Statistics will show whether prices in the goods sector have begun to creep up after several months of stability. I’ll also be watching shelter data for signs on whether cool demand among homebuyers has led to hotter prices for renters.
Thursday: The BLS Producer Price Index isn’t as closely watched by economists as Tuesday’s consumer index. But when domestic producers see price increases, there’s a greater chance that consumers will see more inflation down the road, too. I’ll be on alert for increases in wholesale prices that could dent consumer wallets later this year.
And as always, I’ll also be tuned into the Department of Labor’s jobless claims data on Thursday. Initial claims, a proxy for layoffs, have stabilized at historic lows. But continuing claims have been edging up, suggesting that the job market has become tougher for unemployed workers.
Friday: The week ends with the economy’s most important player: the consumer. Retail sales data from the Census Bureau will indicate whether consumer spending is faltering or shifting into a higher gear. Of late, signs have pointed to the former.
And we’ll get a read on consumer sentiment when the University of Michigan releases its preliminary benchmark for August. In July, consumer sentiment had weakened from a year earlier, but there were signs of a recent upward trend. We’ll see if that continues in August.
