The Atlanta Fed's macroblog provides commentary and analysis on economic topics including monetary policy, macroeconomic developments, inflation, labor economics, and financial issues.
- BLS Handbook of Methods
- Bureau of Economic Analysis
- Bureau of Labor Statistics
- Congressional Budget Office
- Economic Data - FRED® II, St. Louis Fed
- Office of Management and Budget
- Statistics: Releases and Historical Data, Board of Governors
- U.S. Census Bureau Economic Programs
- White House Economic Statistics Briefing Room
November 15, 2016
Wages Climb Higher, Faster
The Atlanta Fed's Wage Growth Tracker is a three-month average of median growth in the hourly earnings of a sample of wage and salary workers taken from the Current Population Survey. Last month in a macroblog post, I noted that the Wage Growth Tracker reading for September, at 3.6 percent, was close to where it had been hovering since April. However, I also noted that the non-averaged median wage growth for September was at a cyclical high of 4.2 percent, and so it would be interesting to see what the October data revealed. Well, the October data are in, and they do confirm a sizeable uptick in wage growth over the last couple of months. The median wage growth for October was 4.0 percent, which brings the Wage Growth Tracker up to 3.9 percent—a percentage point higher than a year ago, and now the highest level since November 2008.
In addition, nominal wage rigidity, as measured by the fraction of workers reporting no change in their hourly rate of pay from 12 months earlier, declined to 13 percent—the lowest since April 2008.
The rise depicted by the Wage Growth Tracker is consistent with the recent trend in average hourly earnings from the payroll survey (up 2.8 percent from a year earlier in October—the fastest pace since June 2009). This increase is occurring even though the unemployment rate has changed little in recent months and is only 10 basis points lower than a year ago. Perhaps employers are finally catching up to the realities of a low unemployment rate. Larger wage gains may also be behind why we are seeing fewer workers leave the labor force. Labor force participation is some 30 or so basis points higher than it was a year ago, and this is primarily because the flow out of the labor force has slowed.
Note: The Wage Growth Tracker website now contains data for the smoothed and unsmoothed series going back to 1983. Previously, the historical data started in 1997. You will notice gaps in the time series in 1995–96 and 1985–86 because the Census Bureau masked the identifiers used to match individual earnings during those periods.
- Hitting a Cyclical High: The Wage Growth Premium from Changing Jobs
- Thoughts on a Long-Run Monetary Policy Framework, Part 4: Flexible Price-Level Targeting in the Big Picture
- Thoughts on a Long-Run Monetary Policy Framework, Part 3: An Example of Flexible Price-Level Targeting
- Thoughts on a Long-Run Monetary Policy Framework, Part 2: The Principle of Bounded Nominal Uncertainty
- Thoughts on a Long-Run Monetary Policy Framework: Framing the Question
- What Are Businesses Saying about Tax Reform Now?
- A First Look at Employment
- Weighting the Wage Growth Tracker
- GDPNow's Forecast: Why Did It Spike Recently?
- How Low Is the Unemployment Rate, Really?
- April 2018
- March 2018
- February 2018
- January 2018
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- May 2017
- Business Cycles
- Business Inflation Expectations
- Capital and Investment
- Capital Markets
- Data Releases
- Economic conditions
- Economic Growth and Development
- Exchange Rates and the Dollar
- Fed Funds Futures
- Federal Debt and Deficits
- Federal Reserve and Monetary Policy
- Financial System
- Fiscal Policy
- Health Care
- Inflation Expectations
- Interest Rates
- Labor Markets
- Latin America/South America
- Monetary Policy
- Money Markets
- Real Estate
- Saving, Capital, and Investment
- Small Business
- Social Security
- This, That, and the Other
- Trade Deficit
- Wage Growth