Nominal Wage Tracker

Updated July 8, 2016

Slow wage growth is a key sign of how far the U.S. economy remains from a full recovery.

On some fronts, the economy is steadily healing from the Great Recession. The unemployment rate is down, and the pace of monthly job growth is reversing some of the damage inflicted by the downturn. But the economy remains far from fully recovered.

A crucial measure of how far from full recovery the economy remains is the growth of nominal wages (wages unadjusted for inflation). Nominal wage growth since the recovery officially began in mid-2009 has been low and flat. This isn’t surprising–the weak labor market of the last seven years has put enormous downward pressure on wages. Employers don’t have to offer big wage increases to get and keep the workers they need. And this remains true even as a jobs recovery has consistently forged ahead in recent years.

Despite the incomplete nature of the recovery, influential voices are already calling for the Federal Reserve to guard against inflation by raising interest rates to slow the economy. The stakes in this debate are high. Macroeconomic policy (including monetary policy) that prioritized very low rates of inflation over low rates of unemployment is a key reason why real wages have stagnated for the vast majority of American workers in recent decades (as we have shown through our Raising America’s Pay initiative). Widespread wage growth will not occur over the coming years if the Federal Reserve prematurely slows the recovery in the name of fighting prospective inflation.

The following charts–which will be updated regularly when new data are released–help explain why the Fed should hold off on raising interest rates until nominal wages are growing at a much faster pace. Until nominal wages are rising by 3.5 to 4 percent, there is no threat that price inflation will begin to significantly exceed the Fed’s 2 percent inflation target. And it will take wage growth of at least 3.5 to 4 percent for workers to begin to reap the benefits of economic growth–and to achieve a genuine recovery from the Great Recession.

Key numbers on nominal wages

  • Growth target for nominal wages: 3.5-4%
  • Actual year-over-year growth for private employees: 2.6%

Nominal wage growth has been far below target in the recovery: Year-over-year change in private-sector nominal average hourly earnings, 2007-2016

Nominal Wage Tracker

Nominal wage growth has been far below target in the recovery: Year-over-year change in private-sector nominal average hourly earnings, 2007-2016

All nonfarm employees Production/nonsupervisory workers
Mar-2007 3.59% 4.11%
Apr-2007 3.27% 3.85%
May-2007 3.73% 4.14%
Jun-2007 3.81% 4.13%
Jul-2007 3.45% 4.05%
Aug-2007 3.49% 4.04%
Sep-2007 3.28% 4.15%
Oct-2007 3.28% 3.78%
Nov-2007 3.27% 3.89%
Dec-2007 3.16% 3.81%
Jan-2008 3.11% 3.86%
Feb-2008 3.09% 3.73%
Mar-2008 3.08% 3.77%
Apr-2008 2.88% 3.70%
May-2008 3.02% 3.69%
Jun-2008 2.67% 3.62%
Jul-2008 3.00% 3.72%
Aug-2008 3.33% 3.83%
Sep-2008 3.23% 3.64%
Oct-2008 3.32% 3.92%
Nov-2008 3.64% 3.85%
Dec-2008 3.58% 3.84%
Jan-2009 3.58% 3.72%
Feb-2009 3.24% 3.65%
Mar-2009 3.13% 3.53%
Apr-2009 3.22% 3.29%
May-2009 2.84% 3.06%
Jun-2009 2.78% 2.94%
Jul-2009 2.59% 2.71%
Aug-2009 2.39% 2.64%
Sep-2009 2.34% 2.75%
Oct-2009 2.34% 2.63%
Nov-2009 2.05% 2.67%
Dec-2009 1.82% 2.50%
Jan-2010 1.95% 2.61%
Feb-2010 2.00% 2.49%
Mar-2010 1.77% 2.27%
Apr-2010 1.81% 2.43%
May-2010 1.94% 2.59%
Jun-2010 1.71% 2.53%
Jul-2010 1.85% 2.47%
Aug-2010 1.75% 2.41%
Sep-2010 1.84% 2.30%
Oct-2010 1.88% 2.51%
Nov-2010 1.65% 2.23%
Dec-2010 1.74% 2.07%
Jan-2011 1.92% 2.17%
Feb-2011 1.87% 2.12%
Mar-2011 1.87% 2.06%
Apr-2011 1.91% 2.11%
May-2011 2.00% 2.16%
Jun-2011 2.13% 2.00%
Jul-2011 2.26% 2.31%
Aug-2011 1.90% 1.99%
Sep-2011 1.94% 1.93%
Oct-2011 2.11% 1.77%
Nov-2011 2.02% 1.77%
Dec-2011 1.98% 1.77%
Jan-2012 1.75% 1.40%
Feb-2012 1.88% 1.45%
Mar-2012 2.10% 1.76%
Apr-2012 2.01% 1.76%
May-2012 1.83% 1.39%
Jun-2012 1.95% 1.54%
Jul-2012 1.77% 1.33%
Aug-2012 1.82% 1.33%
Sep-2012 1.99% 1.44%
Oct-2012 1.51% 1.28%
Nov-2012 1.90% 1.43%
Dec-2012 2.20% 1.74%
Jan-2013 2.15% 1.89%
Feb-2013 2.10% 2.04%
Mar-2013 1.93% 1.88%
Apr-2013 2.01% 1.73%
May-2013 2.01% 1.88%
Jun-2013 2.13% 2.03%
Jul-2013 1.91% 1.92%
Aug-2013 2.26% 2.18%
Sep-2013 2.04% 2.17%
Oct-2013 2.25% 2.27%
Nov-2013 2.24% 2.32%
Dec-2013 1.90% 2.16%
Jan-2014 1.94% 2.31%
Feb-2014 2.14% 2.45%
Mar-2014 2.18% 2.40%
Apr-2014 1.97% 2.40%
May-2014 2.13% 2.44%
Jun-2014 2.04% 2.34%
Jul-2014 2.09% 2.43%
Aug-2014 2.21% 2.48%
Sep-2014 2.04% 2.27%
Oct-2014 2.03% 2.27%
Nov-2014 2.11% 2.26%
Dec-2014 1.82% 1.87%
Jan-2015 2.23% 2.01%
Feb-2015 2.06% 1.71%
Mar-2015 2.18% 1.90%
Apr-2015 2.34% 2.00%
May-2015 2.34% 2.14%
Jun-2015 2.04% 1.99%
Jul-2015 2.29% 2.04%
Aug-2015 2.32% 2.08%
Sep-2015 2.40% 2.13%
Oct-2015 2.52% 2.36%
Nov-2015 2.39% 2.21%
Dec-2015 2.60% 2.61%
Jan-2016 2.50% 2.50%
Feb-2016 2.38% 2.50%
Mar-2016 2.33% 2.44%
Apr-2016 2.53% 2.53%
May-2016 2.48% 2.29%
Jun-2016 2.60% 2.43%
ChartData Download data

The data below can be saved or copied directly into Excel.

*Nominal wage growth consistent with the Federal Reserve Board's 2 percent inflation target, 1.5 percent productivity growth, and a stable labor share of income.

Source: EPI analysis of Bureau of Labor Statistics Current Employment Statistics public data series

Copy the code below to embed this chart on your website.

This figure shows nominal average hourly earnings for all private-sector workers and for private-sector production/nonsupervisory workers since 2007. It’s clear that nominal wage growth (using either measure) has been flat for a long time—and there’s little evidence this trend has changed in recent months.

The horizontal shaded area represents growth of 3.5 to 4 percent—nominal wage growth consistent with the Fed’s 2 percent inflation target and a stable labor share of income (given a range of 1.5 to 2 percent trend productivity growth).

We need to see consistent wage growth above this range before there is a hint of upward pressure on prices stemming from too-tight labor markets. Thus, the Fed should not even consider raising interest rates to forestall inflation until wage growth is consistently above this target.

Mind the wage gap: Cumulative nominal average hourly earnings, actual and hypothetical if they had grown at 3.5% since the recession began, 2007-2016

Nominal Wage Tracker

Mind the wage gap: Cumulative nominal average hourly earnings, actual and hypothetical if they had grown at 3.5% since the recession began, 2007-2016

Average hourly earnings of all private employees Hypothetical, assuming 3.5% growth* 
Jan-2007 $20.60
Feb-2007 $20.68
Mar-2007 $20.77
Apr-2007 $20.82
May-2007 $20.88
Jun-2007 $21.00
Jul-2007 $21.00
Aug-2007 $21.03
Sep-2007 $21.08
Oct-2007 $21.11
Nov-2007 $21.15
Dec-2007 $21.22 $21.22
Jan-2008 $21.24 $21.28
Feb-2008 $21.32 $21.34
Mar-2008 $21.41 $21.40
Apr-2008 $21.42 $21.46
May-2008 $21.51 $21.53
Jun-2008 $21.56 $21.59
Jul-2008 $21.63 $21.65
Aug-2008 $21.73 $21.71
Sep-2008 $21.76 $21.77
Oct-2008 $21.81 $21.84
Nov-2008 $21.92 $21.90
Dec-2008 $21.98 $21.96
Jan-2009 $22.00 $22.03
Feb-2009 $22.01 $22.09
Mar-2009 $22.08 $22.15
Apr-2009 $22.11 $22.22
May-2009 $22.12 $22.28
Jun-2009 $22.16 $22.34
Jul-2009 $22.19 $22.41
Aug-2009 $22.25 $22.47
Sep-2009 $22.27 $22.54
Oct-2009 $22.32 $22.60
Nov-2009 $22.37 $22.67
Dec-2009 $22.38 $22.73
Jan-2010 $22.43 $22.80
Feb-2010 $22.45 $22.86
Mar-2010 $22.47 $22.93
Apr-2010 $22.51 $22.99
May-2010 $22.55 $23.06
Jun-2010 $22.54 $23.13
Jul-2010 $22.60 $23.19
Aug-2010 $22.64 $23.26
Sep-2010 $22.68 $23.33
Oct-2010 $22.74 $23.39
Nov-2010 $22.74 $23.46
Dec-2010 $22.77 $23.53
Jan-2011 $22.86 $23.59
Feb-2011 $22.87 $23.66
Mar-2011 $22.89 $23.73
Apr-2011 $22.94 $23.80
May-2011 $23.00 $23.87
Jun-2011 $23.02 $23.94
Jul-2011 $23.11 $24.00
Aug-2011 $23.07 $24.07
Sep-2011 $23.12 $24.14
Oct-2011 $23.22 $24.21
Nov-2011 $23.20 $24.28
Dec-2011 $23.22 $24.35
Jan-2012 $23.26 $24.42
Feb-2012 $23.30 $24.49
Mar-2012 $23.37 $24.56
Apr-2012 $23.40 $24.63
May-2012 $23.42 $24.70
Jun-2012 $23.47 $24.77
Jul-2012 $23.52 $24.84
Aug-2012 $23.49 $24.92
Sep-2012 $23.58 $24.99
Oct-2012 $23.57 $25.06
Nov-2012 $23.64 $25.13
Dec-2012 $23.73 $25.20
Jan-2013 $23.76 $25.28
Feb-2013 $23.79 $25.35
Mar-2013 $23.82 $25.42
Apr-2013 $23.87 $25.49
May-2013 $23.89 $25.57
Jun-2013 $23.97 $25.64
Jul-2013 $23.97 $25.71
Aug-2013 $24.02 $25.79
Sep-2013 $24.06 $25.86
Oct-2013 $24.10 $25.94
Nov-2013 $24.17 $26.01
Dec-2013 $24.18 $26.08
Jan-2014 $24.22 $26.16
Feb-2014 $24.30 $26.23
Mar-2014 $24.34 $26.31
Apr-2014 $24.34 $26.39
May-2014 $24.40 $26.46
Jun-2014 $24.46 $26.54
Jul-2014 $24.47 $26.61
Aug-2014 $24.55 $26.69
Sep-2014 $24.55 $26.77
Oct-2014 $24.59 $26.84
Nov-2014 $24.68 $26.92
Dec-2014 $24.62 $27.00
Jan-2015 $24.76 $27.08
Feb-2015 $24.80 $27.15
Mar-2015 $24.87 $27.23
Apr-2015 $24.91 $27.31
May-2015 $24.97 $27.39
Jun-2015 $24.96 $27.47
Jul-2015 $25.03 $27.55
Aug-2015 $25.12 $27.62
Sep-2015 $25.14 $27.70
Oct-2015 $25.21 $27.78
Nov-2015 $25.27 $27.86
Dec-2015 $25.26 $27.95
Jan-2016 $25.38 $28.05
Feb-2016 $25.39 $28.14
Mar-2016 $25.45 $28.23
Apr-2016 $25.54 $28.32
May-2016 $25.59 $28.41
Jun-2016 $25.61   $28.51 
ChartData Download data

The data below can be saved or copied directly into Excel.

Nominal wage growth consistent with the Federal Reserve Board's 2 percent inflation target, 1.5 percent productivity growth, and a stable labor share of income.

Source: EPI analysis of Bureau of Labor Statistics Current Employment Statistics public data series

Copy the code below to embed this chart on your website.

In truth, the economy (and workers) could benefit from consistent wage growth significantly higher than 3.5 percent for an extended period of time. This figure shows the cumulative gap between actual average private-sector nominal hourly earnings and what these earnings would be today had they matched the 3.5 percent wage target since the start of the Great Recession in late 2007. The latest data indicate that average hourly earnings would be $2.90 higher today under this hypothetical scenario. Consistent wage growth at or above 3.5 percent is necessary for workers to recoup some of these unrealized earnings.

Workers’ share of corporate income hasn’t recovered: Share of corporate-sector income received by workers over recent business cycles, 1979–2014

Nominal Wage Tracker

Workers’ share of corporate income hasn’t recovered: Share of corporate-sector income received by workers over recent business cycles, 1979–2016

Labor Share
Jan-1979 79.0%
Apr-1979 79.5%
Jul-1979 80.2%
Oct-1979 80.8%
Jan-1980 81.2%
Apr-1980 82.7%
Jul-1980 81.9%
Oct-1980 80.6%
Jan-1981 80.3%
Apr-1981 80.4%
Jul-1981 79.6%
Oct-1981 80.5%
Jan-1982 81.6%
Apr-1982 81.0%
Jul-1982 81.0%
Oct-1982 81.4%
Jan-1983 81.0%
Apr-1983 79.9%
Jul-1983 79.4%
Oct-1983 79.1%
Jan-1984 77.8%
Apr-1984 78.0%
Jul-1984 78.5%
Oct-1984 78.3%
Jan-1985 78.4%
Apr-1985 78.6%
Jul-1985 78.2%
Oct-1985 79.6%
Jan-1986 79.9%
Apr-1986 80.8%
Jul-1986 81.5%
Oct-1986 81.8%
Jan-1987 81.7%
Apr-1987 80.9%
Jul-1987 80.4%
Oct-1987 80.9%
Jan-1988 80.9%
Apr-1988 80.9%
Jul-1988 80.8%
Oct-1988 80.2%
Jan-1989 80.6%
Apr-1989 80.9%
Jul-1989 80.9%
Oct-1989 81.9%
Jan-1990 81.8%
Apr-1990 81.6%
Jul-1990 82.7%
Oct-1990 83.1%
Jan-1991 82.2%
Apr-1991 82.5%
Jul-1991 82.8%
Oct-1991 83.3%
Jan-1992 83.0%
Apr-1992 83.1%
Jul-1992 83.6%
Oct-1992 83.0%
Jan-1993 83.5%
Apr-1993 82.7%
Jul-1993 82.7%
Oct-1993 81.4%
Jan-1994 81.4%
Apr-1994 81.3%
Jul-1994 80.6%
Oct-1994 80.3%
Jan-1995 80.6%
Apr-1995 80.4%
Jul-1995 79.5%
Oct-1995 79.7%
Jan-1996 79.1%
Apr-1996 79.1%
Jul-1996 79.2%
Oct-1996 79.3%
Jan-1997 79.0%
Apr-1997 78.9%
Jul-1997 78.3%
Oct-1997 78.5%
Jan-1998 79.9%
Apr-1998 79.9%
Jul-1998 79.8%
Oct-1998 80.4%
Jan-1999 80.3%
Apr-1999 80.6%
Jul-1999 81.0%
Oct-1999 81.4%
Jan-2000 81.8%
Apr-2000 81.9%
Jul-2000 82.4%
Oct-2000 83.1%
Jan-2001 83.1%
Apr-2001 82.8%
Jul-2001 83.0%
Oct-2001 84.0%
Jan-2002 82.0%
Apr-2002 81.8%
Jul-2002 81.8%
Oct-2002 80.9%
Jan-2003 80.3%
Apr-2003 80.1%
Jul-2003 79.8%
Oct-2003 79.9%
Jan-2004 78.8%
Apr-2004 78.7%
Jul-2004 78.6%
Oct-2004 78.5%
Jan-2005 77.0%
Apr-2005 76.9%
Jul-2005 77.2%
Oct-2005 76.0%
Jan-2006 75.5%
Apr-2006 75.4%
Jul-2006 74.7%
Oct-2006 76.1%
Jan-2007 77.3%
Apr-2007 76.9%
Jul-2007 78.3%
Oct-2007 79.4%
Jan-2008 79.8%
Apr-2008 79.7%
Jul-2008 80.1%
Oct-2008 83.7%
Jan-2009 79.8%
Apr-2009 79.4%
Jul-2009 78.4%
Oct-2009 77.4%
Jan-2010 76.4%
Apr-2010 76.7%
Jul-2010 74.9%
Oct-2010 74.9%
Jan-2011 77.1%
Apr-2011 76.0%
Jul-2011 76.0%
Oct-2011 74.2%
Jan-2012 74.6%
Apr-2012 74.2%
Jul-2012 73.9%
Oct-2012 74.6%
Jan-2013 74.0%
Apr-2013 73.6%
Jul-2013 73.5%
Oct-2013 73.8%
Jan-2014 75.9%
Apr-2014 74.5%
Jul-2014 73.6%
Oct-2014 74.2%
Jan-2015 75.7%
Apr-2015 75.5%
Jul-2015 75.8%
Oct-2015 76.7%
Jan-2016 77.5%
ChartData Download data

The data below can be saved or copied directly into Excel.

Note: Shaded areas denote recessions. Federal Reserve banks' corporate profits were netted out in the calculation of labor share.

Source: EPI analysis of Bureau of Economic Analysis National Income and Product Accounts (Tables 1.14 and 6.16D)

Copy the code below to embed this chart on your website.

Consistent wage growth of well over 4 percent would also allow the labor share of corporate-sector income— the share of corporate income received by workers in the form of wages and benefits—to begin to make up its recent losses. This figure  illustrates the labor share of corporate-sector income since 1979. Typically, the labor share rises during recessions because profits fall much faster than wages during downturns. Then, in the early stages of recovery, the labor share falls significantly as profits increase much more rapidly than wages. Usually, the labor share then rises again late in the expansion as labor markets tighten and workers regain the bargaining power necessary to secure wage increases. As of yet, however, there is little evidence that the labor share has begun any reliable rise following its long fall in the recovery from the Great Recession.

Note on the nominal wage target

The nominal wage target of 3.5 to 4 percent is defined as nominal wage growth consistent with the Federal Reserve’s 2 percent overall price inflation target, 1.5 to 2 percent productivity growth, and a stable labor share of income. As an example, if trend productivity growth is 1.5 percent, this implies that nominal wage growth of 1.5 percent puts zero upward pressure on overall prices; while an hour of work has gotten 1.5 percent more expensive, the same hour produces 1.5 percent more output, so costs per unit of output are flat. Nominal wage growth of 3.5 percent with 1.5 percent trend productivity growth implies that labor costs would be rising 2 percent annually–and if labor costs were stable as a share of overall output, this implies prices overall would be rising at 2 percent, which is the Fed’s price growth target.