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Federal Reserve Bank of San Francisco
FRBSF Economic Letter
Does Ultra-Low Unemployment Spur Rapid Wage Growth?
Sylvain Leduc
Chitra Marti
Daniel J. Wilson
Abstract

The unemployment rate ended 2018 at just under 4%, substantially lower than most estimates of the natural rate. Could such an ostensibly tight labor market lead to a sharp pickup in wage growth from its recent moderate pace, such that the relationship between wage growth and unemployment is not always linear? Investigations using state-level data show no economically significant nonlinearity between wage growth and unemployment that would predict an abrupt jump in wage growth.


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Sylvain Leduc & Chitra Marti & Daniel J. Wilson, "Does Ultra-Low Unemployment Spur Rapid Wage Growth?" , Federal Reserve Bank of San Francisco, FRBSF Economic Letter, number 02, 2019.
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