A measure of core wage inflation

Saved in:

Authors and Corporations:

Almuzara, Martin (Author), Audoly, Richard (Author), Melcangi, Davide (Author)

Other Authors:

Audoly, Richard [Author] • Melcangi, Davide [Author]

Edition:

Revised January 2024

Type of Resource:

E-Book

Language:

English

published:

[New York, NY] Federal Reserve Bank of New York [2024]

Series:

Subjects:

wage inflation

persistence

factor models

Graue Literatur

Source:

Verbunddaten SWB
Lizenzfreie Online-Ressourcen

Description
Summary:	We recover the persistent ("core") component of nominal wage growth over the past twenty-five years in the United States. Our approach combines worker-level data with time-series smoothing methods and can disentangle the common persistence of wage inflation from the persistence specific to some subgroup of workers, such as workers in a specific industry. We find that most of the business cycle fluctuations in wage inflation are persistent and driven by a common factor. This common persistent factor is particularly important during inflationary periods, and it explains 80 to 90 percent of the post-pandemic surge in wage inflation. Contrary to standard measures of wage inflation, the persistent component of wage inflation contemporaneously co-moves with labor market tightness.
Physical Description:	1 Online-Ressource (circa 42 Seiten); Illustrationen