Wage target shouldn't be set too low: Cumulative growth in real wages, productivity, and 1.5% trend productivity growth, 2006Q1–2019Q2
| year | Nominal wage growth minus 2% | Actual productivity growth | 1.5% trend productivity |
|---|---|---|---|
| 2006-Q1 | 0.0 | 0.0 | 0.0 |
| 2006-Q2 | 0.5 | 0.5 | 0.4 |
| 2006-Q3 | 1.0 | 0.9 | 0.7 |
| 2006-Q4 | 1.5 | 1.2 | 1.1 |
| 2007-Q1 | 2.0 | 1.5 | 1.5 |
| 2007-Q2 | 2.6 | 1.7 | 1.9 |
| 2007-Q3 | 3.1 | 2.0 | 2.3 |
| 2007-Q4 | 3.5 | 2.3 | 2.6 |
| 2008-Q1 | 4.0 | 2.4 | 3.0 |
| 2008-Q2 | 4.4 | 2.7 | 3.4 |
| 2008-Q3 | 4.9 | 2.9 | 3.8 |
| 2008-Q4 | 5.4 | 2.9 | 4.2 |
| 2009-Q1 | 5.8 | 3.0 | 4.6 |
| 2009-Q2 | 6.1 | 3.3 | 5.0 |
| 2009-Q3 | 6.3 | 3.6 | 5.3 |
| 2009-Q4 | 6.4 | 4.1 | 5.7 |
| 2010-Q1 | 6.6 | 4.6 | 6.1 |
| 2010-Q2 | 6.7 | 5.1 | 6.5 |
| 2010-Q3 | 6.8 | 5.6 | 6.9 |
| 2010-Q4 | 6.8 | 6.1 | 7.3 |
| 2011-Q1 | 6.9 | 6.6 | 7.7 |
| 2011-Q2 | 6.9 | 7.0 | 8.1 |
| 2011-Q3 | 6.9 | 7.4 | 8.5 |
| 2011-Q4 | 6.9 | 7.9 | 8.9 |
| 2012-Q1 | 6.7 | 8.4 | 9.3 |
| 2012-Q2 | 6.6 | 8.8 | 9.8 |
| 2012-Q3 | 6.5 | 9.0 | 10.2 |
| 2012-Q4 | 6.3 | 9.1 | 10.6 |
| 2013-Q1 | 6.3 | 9.2 | 11.0 |
| 2013-Q2 | 6.3 | 9.3 | 11.4 |
| 2013-Q3 | 6.3 | 9.3 | 11.8 |
| 2013-Q4 | 6.4 | 9.4 | 12.2 |
| 2014-Q1 | 6.5 | 9.4 | 12.6 |
| 2014-Q2 | 6.6 | 9.6 | 13.1 |
| 2014-Q3 | 6.7 | 9.8 | 13.5 |
| 2014-Q4 | 6.7 | 9.9 | 13.9 |
| 2015-Q1 | 6.7 | 10.0 | 14.3 |
| 2015-Q2 | 6.7 | 10.1 | 14.8 |
| 2015-Q3 | 6.7 | 10.4 | 15.2 |
| 2015-Q4 | 6.8 | 10.5 | 15.6 |
| 2016-Q1 | 6.9 | 10.7 | 16.1 |
| 2016-Q2 | 7.0 | 10.8 | 16.5 |
| 2016-Q3 | 7.2 | 11.0 | 16.9 |
| 2016-Q4 | 7.3 | 11.1 | 17.4 |
| 2017-Q1 | 7.4 | 11.3 | 17.8 |
| 2017-Q2 | 7.5 | 11.5 | 18.2 |
| 2017-Q3 | 7.6 | 11.7 | 18.7 |
| 2017-Q4 | 7.7 | 11.9 | 19.1 |
| 2018-Q1 | 7.8 | 12.0 | 19.6 |
| 2018-Q2 | 8.1 | 12.2 | 20.0 |
| 2018-Q3 | 8.3 | 12.4 | 20.5 |
| 2018-Q4 | 8.7 | 12.6 | 20.9 |
| 2019-Q1 | 9.1 | 13.0 | 21.4 |
| 2019-Q2 | 9.4 | 13.4 | 21.8 |
Note: The real wage measure is constructed by calculating growth in average hourly earnings from the Bureau of Labor Statistics (BLS) Current Employment Statistics (CES) program and subtracting 2% annualized growth to reflect the Fed's inflation target. Productivity growth is the same measure as Figure A, and the trend line shows growth at a 1.5% annualized rate.
Source: Bureau of Labor Statistics