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Moderate Wage Growth Spurs Search for ‘Hidden Slack’ in Labor Market
In recent years, much has been made about the idea of hidden slack—unused labor capacity not captured by the unemployment rate.
Journal Article
How Aggregation Matters for Measured Wage Growth
Wage growth is often measured by the change in average hourly earnings (AHE), a gauge of overall wages that aggregates information on earnings and hours worked across individuals. A close look at this aggregation method demonstrates that AHE growth reflects disproportionately the profile of high-earning workers who typically display lower and less cyclically sensitive wage growth. Using data from the Current Population Survey (CPS), we adopt a different aggregation method and compute wage growth as the average of individuals’ wage growth. The analysis indicates that the CPS measure of ...
Journal Article
Reserve Adequacy Explains Emerging-Market Sensitivity to U.S. Monetary Policy
Emerging economies that borrow in U.S. dollars are sensitive to U.S. monetary policy due to changing exchange rates. However, the marginal effect of this sensitivity is determined by the relative amount of U.S. dollars held in reserve.
A Natural Approach to Estimating the ‘Natural Rate’ of Unemployment
The unemployment rate is a widely viewed gauge of U.S. labor market slack or tightness. Because of structural changes to the labor market over time, assessments about slack/tightness require a reference point called the “natural rate of unemployment.”
Is Wage Growth Higher than We Think?
There is always widespread interest in the degree to which the U.S. labor market generates higher pay for workers. A standard measure of wage growth suggests that this expansion is not improving the standard of living of workers, but our analysis reveals that actual wage growth is understated.
What’s Up (or Not Up) with Wages?
This is the third of three articles that talk about the natural rate of unemployment, the unemployment rate that would prevail in a “neutral” labor market after removing all movement due to the business cycle.
As Wages Rise, Are Black Workers Seeing the Smallest Gains?
A recent article argued that black workers have received the smallest earnings gains among various groups since the beginning of the Great Recession. Our analysis suggests otherwise.
How Much Do Movers Move Average Wage Growth?
Data from the Current Population Survey, a household survey used to compute the unemployment rate, do not include individuals who change residences. If it could include movers, our previous estimate of 2018 average individual wage growth would increase from 5.0 percent to 5.5 percent or higher.