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When It Comes to Wage Growth, the Measure Matters


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;

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Bibliographic Information

Provider: Federal Reserve Bank of Chicago

Part of Series: Chicago Fed Letter

Publication Date: 2017

Order Number: 387