The Great Resignation isn't paying off like it was this summer

• The Atlanta Fed's Wage Growth Tracker shows wage growth for job switchers has slowed.
• "At least in the short term, wage growth for job switchers is far more likely to decline than increase," Indeed's Nick Bunker said.
• However, wage growth is still stronger for job switchers than job stayers.

One of the big reasons people have been switching jobs during the Great Resignation is the allure of higher pay at a new gig.

Now, that extra incentive might be less lucrative than it was just months ago.

Nick Bunker, economic research director at Indeed Hiring Lab, wrote on Twitter based on the Atlanta Fed's Wage Growth Tracker that "wage growth for job switchers seems to have peaked back in July. It's dropped almost a percentage point in 3 months."

"At least in the short term, wage growth for job switchers is far more likely to decline than increase," Bunker told Insider in a statement.

Based on three-month moving averages of year-over-year changes, wage growth was 8.5% in July for job switchers. It ticked down to 8.4% the following month before falling to 7.9% and 7.6% in September and October respectively. However, wage growth for job switchers was still above overall wage growth in October of 6.4%.

A big reason people have quit their jobs during the Great Resignation has been because of pay. Although wage growth for people switching to new opportunities may have peaked, the monthly level of quits as reported by the Bureau of Labor Statistics is still high, although it has also slowed in recent months.

"The Great Resignation is not over yet," Daniel Zhao, lead economist at Glassdoor, told Insider in a statement. "Quits are high and the job market still leans towards workers, but with the risk of an impending recession, the market is certainly cooling off."

Job switchers still have bargaining power, but "just not as much as they did a few months ago," Bunker said.

"Job switchers will likely see strong wage gains in the months ahead, but a waning Great Resignation means the gains won't be as large," Bunker said.

The job market is also still strong as the US continues to add hundreds of thousands of jobs a month; the US added 261,000 nonfarm payrolls in October. There were over 10 million job openings in September as well as 6.1 million hires that month.

With a tight yet cooling labor market, the fierce competition among employers for workers that job seekers and unemployed Americans have become used to during the pandemic may be changing.

"Demand for workers is fading and quits rates have been trending downward for most of this year," Bunker said. "In other words, there's less competition for workers. That means workers have less leverage and are unlikely to receive pay gains on par with what they got in late 2021."

Although wage growth may have slowed from this summer for job switchers, it's still higher than the growth of their peers who have stayed in their positions.

But with talks of a recession next year — although likely to be a mild one — current employees, "quiet quitters", and people resigning alike may be worried about what a downturn means for job security as well as bargaining power.

"In general, voluntary job switchers have more leverage than job stayers, but a recession hits all workers hard," Zhao said. "As the economy slows, job switchers will increasingly have to make the trade-off between higher pay for less job security."