When It Comes to Wage Growth, the Measure Matters

Ross Cole, Luojia Hu and Sam Schulhofer-Wohl

Chicago Fed Letter, 2017, No 387

Abstract: Average wages are a closely watched economic indicator. The growth rate of average wages can help tell us, for example, how workers? living standards are changing, whether employers face rising costs that they might pass through to consumer price inflation, and whether the labor market is tight or has room to improve further. In the realm of monetary policy, the last two applications are particularly important because they can help people assess the outlook for the Federal Reserve?s ?dual mandate? of price stability and maximum employment.

Keywords: Income; wages (search for similar items in EconPapers)
Date: 2017
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