Figure D
Immediate post–Great Recession period explains the declining predictive power of unemployment on wages : Predicted nominal wage changes and actual nominal wage changes, 1979–2018
| Predicted nominal wage change | Actual nominal wage change | |
|---|---|---|
| 1979-Q1 | 6.4568% | 8.5480% |
| 1979-Q2 | 6.9673% | 7.7275% |
| 1979-Q3 | 7.1740% | 7.9820% |
| 1979-Q4 | 7.5579% | 7.5949% |
| 1980-Q1 | 7.8323% | 7.3355% |
| 1980-Q2 | 7.5601% | 7.8640% |
| 1980-Q3 | 7.6828% | 7.8605% |
| 1980-Q4 | 8.2987% | 8.6445% |
| 1981-Q1 | 8.6399% | 9.0955% |
| 1981-Q2 | 8.8435% | 8.9655% |
| 1981-Q3 | 8.9093% | 8.8803% |
| 1981-Q4 | 8.1953% | 7.6742% |
| 1982-Q1 | 7.5155% | 6.9093% |
| 1982-Q2 | 6.5770% | 6.0127% |
| 1982-Q3 | 5.6151% | 5.3635% |
| 1982-Q4 | 4.3919% | 4.7661% |
| 1983-Q1 | 4.0328% | 4.5239% |
| 1983-Q2 | 3.6313% | 4.4350% |
| 1983-Q3 | 3.6747% | 3.8704% |
| 1983-Q4 | 3.8395% | 4.1736% |
| 1984-Q1 | 3.7962% | 3.7098% |
| 1984-Q2 | 3.8859% | 3.5933% |
| 1984-Q3 | 3.6103% | 3.6857% |
| 1984-Q4 | 3.4368% | 3.0849% |
| 1985-Q1 | 3.3082% | 3.0207% |
| 1985-Q2 | 3.0360% | 2.9957% |
| 1985-Q3 | 2.9615% | 2.7734% |
| 1985-Q4 | 3.0002% | 2.9149% |
| 1986-Q1 | 2.9136% | 2.7006% |
| 1986-Q2 | 2.5933% | 2.1814% |
| 1986-Q3 | 2.4426% | 1.8624% |
| 1986-Q4 | 2.3243% | 1.8505% |
| 1987-Q1 | 2.1802% | 1.9534% |
| 1987-Q2 | 2.2492% | 2.2472% |
| 1987-Q3 | 2.5366% | 2.5746% |
| 1987-Q4 | 2.8056% | 2.9663% |
| 1988-Q1 | 3.0181% | 2.7634% |
| 1988-Q2 | 3.2665% | 3.2601% |
| 1988-Q3 | 3.4062% | 3.3830% |
| 1988-Q4 | 3.7379% | 3.4930% |
| 1989-Q1 | 4.0190% | 4.0875% |
| 1989-Q2 | 4.2318% | 3.7602% |
| 1989-Q3 | 4.4209% | 3.8705% |
| 1989-Q4 | 4.3500% | 3.8274% |
| 1990-Q1 | 4.5140% | 4.0303% |
| 1990-Q2 | 4.6829% | 4.2051% |
| 1990-Q3 | 4.3946% | 4.1328% |
| 1990-Q4 | 4.2089% | 3.7869% |
| 1991-Q1 | 4.0041% | 3.2450% |
| 1991-Q2 | 3.8937% | 3.2152% |
| 1991-Q3 | 3.7944% | 3.0579% |
| 1991-Q4 | 3.4960% | 2.8092% |
| 1992-Q1 | 2.9904% | 2.6620% |
| 1992-Q2 | 2.5399% | 2.4476% |
| 1992-Q3 | 2.3386% | 2.3674% |
| 1992-Q4 | 2.2722% | 2.4812% |
| 1993-Q1 | 2.2684% | 2.6867% |
| 1993-Q2 | 2.0688% | 2.5132% |
| 1993-Q3 | 2.1733% | 2.4360% |
| 1993-Q4 | 2.2161% | 2.5437% |
| 1994-Q1 | 2.1219% | 2.5555% |
| 1994-Q2 | 2.3637% | 2.5121% |
| 1994-Q3 | 2.4079% | 2.6189% |
| 1994-Q4 | 2.6998% | 2.6300% |
| 1995-Q1 | 2.7405% | 2.5215% |
| 1995-Q2 | 2.5620% | 2.6867% |
| 1995-Q3 | 2.5743% | 2.9334% |
| 1995-Q4 | 2.6462% | 2.9121% |
| 1996-Q1 | 2.7328% | 3.0961% |
| 1996-Q2 | 2.7614% | 3.4503% |
| 1996-Q3 | 2.9853% | 3.4198% |
| 1996-Q4 | 3.0281% | 3.5937% |
| 1997-Q1 | 3.2039% | 3.7609% |
| 1997-Q2 | 3.4235% | 3.6131% |
| 1997-Q3 | 3.4660% | 3.8027% |
| 1997-Q4 | 3.5928% | 4.2065% |
| 1998-Q1 | 3.5966% | 4.1655% |
| 1998-Q2 | 3.6223% | 4.2918% |
| 1998-Q3 | 3.4048% | 4.0350% |
| 1998-Q4 | 3.3602% | 3.6697% |
| 1999-Q1 | 3.2924% | 3.6095% |
| 1999-Q2 | 3.1843% | 3.6008% |
| 1999-Q3 | 3.2572% | 3.7765% |
| 1999-Q4 | 3.3716% | 3.6662% |
| 2000-Q1 | 3.5472% | 3.7594% |
| 2000-Q2 | 3.8250% | 3.8481% |
| 2000-Q3 | 3.9408% | 3.8358% |
| 2000-Q4 | 4.2454% | 4.1463% |
| 2001-Q1 | 4.1994% | 4.0580% |
| 2001-Q2 | 4.2207% | 3.9684% |
| 2001-Q3 | 4.0310% | 3.6704% |
| 2001-Q4 | 3.4834% | 3.3489% |
| 2002-Q1 | 3.2336% | 2.9944% |
| 2002-Q2 | 2.9470% | 2.6903% |
| 2002-Q3 | 2.8163% | 2.9237% |
| 2002-Q4 | 2.4633% | 3.0591% |
| 2003-Q1 | 2.3758% | 3.2004% |
| 2003-Q2 | 2.1979% | 2.9333% |
| 2003-Q3 | 2.1004% | 2.6187% |
| 2003-Q4 | 2.3025% | 1.9569% |
| 2004-Q1 | 2.3464% | 1.7908% |
| 2004-Q2 | 2.4058% | 2.0231% |
| 2004-Q3 | 2.6931% | 2.1194% |
| 2004-Q4 | 2.7882% | 2.4585% |
| 2005-Q1 | 3.0226% | 2.5531% |
| 2005-Q2 | 3.2727% | 2.6226% |
| 2005-Q3 | 3.4576% | 2.7319% |
| 2005-Q4 | 3.6522% | 3.0309% |
| 2006-Q1 | 4.0823% | 3.4310% |
| 2006-Q2 | 4.3377% | 3.9061% |
| 2006-Q3 | 4.4906% | 4.0404% |
| 2006-Q4 | 4.7206% | 4.1267% |
| 2007-Q1 | 4.4964% | 4.0858% |
| 2007-Q2 | 4.4399% | 4.0592% |
| 2007-Q3 | 4.2121% | 4.0618% |
| 2007-Q4 | 3.9904% | 3.7865% |
| 2008-Q1 | 3.9029% | 3.8088% |
| 2008-Q2 | 3.7446% | 3.6510% |
| 2008-Q3 | 3.2556% | 3.7319% |
| 2008-Q4 | 2.7425% | 3.8752% |
| 2009-Q1 | 1.4262% | 3.6129% |
| 2009-Q2 | 0.2150% | 3.0960% |
| 2009-Q3 | -0.5686% | 2.7166% |
| 2009-Q4 | -1.3954% | 2.6206% |
| 2010-Q1 | -1.5087% | 2.4932% |
| 2010-Q2 | -1.4088% | 2.4996% |
| 2010-Q3 | -1.4654% | 2.3231% |
| 2010-Q4 | -1.7253% | 2.1990% |
| 2011-Q1 | -1.3960% | 2.1505% |
| 2011-Q2 | -1.3722% | 2.0877% |
| 2011-Q3 | -0.9381% | 2.0782% |
| 2011-Q4 | -0.1843% | 1.8220% |
| 2012-Q1 | 0.2929% | 1.5186% |
| 2012-Q2 | 0.4972% | 1.5467% |
| 2012-Q3 | 0.7122% | 1.4200% |
| 2012-Q4 | 0.9508% | 1.4485% |
| 2013-Q1 | 1.0609% | 1.9208% |
| 2013-Q2 | 1.1572% | 1.8954% |
| 2013-Q3 | 1.2468% | 2.1255% |
| 2013-Q4 | 1.3511% | 2.3182% |
| 2014-Q1 | 1.3599% | 2.3516% |
| 2014-Q2 | 1.6594% | 2.3916% |
| 2014-Q3 | 1.7429% | 2.3621% |
| 2014-Q4 | 2.0478% | 2.1343% |
| 2015-Q1 | 2.1240% | 1.8902% |
| 2015-Q2 | 1.9794% | 2.0600% |
| 2015-Q3 | 2.0349% | 2.0332% |
| 2015-Q4 | 1.9391% | 2.3308% |
| 2016-Q1 | 1.9165% | 2.4468% |
| 2016-Q2 | 1.9033% | 2.4476% |
| 2016-Q3 | 1.8453% | 2.5304% |
| 2016-Q4 | 1.8932% | 2.4191% |
| 2017-Q1 | 2.1424% | 2.3259% |
| 2017-Q2 | 2.5573% | 2.2960% |
| 2017-Q3 | 2.7936% | 2.3754% |
| 2017-Q4 | 3.1166% | 2.3313% |
| 2018-Q1 | 3.2593% | 2.5019% |
| 2018-Q2 | 3.5560% | 2.7146% |
| 2018-Q3 | 3.8445% | 2.8326% |
| 2018-Q4 | 4.0281% | 3.2524% |
Note: The predicted nominal wage change is obtained from a regression of nominal wage changes on expected inflation and the unemployment rate for the years 1979–2007. The predicted nominal wage changes from this regression fit very tightly with actual nominal changes until the immediate post–Great Recession period (shaded in the figure).
Source: Unemployment rates are from the Bureau of Labor Statistics (BLS) Current Population Survey and wages are the average hourly earnings of production and nonsupervisory workers from the BLS Current Employment Statistics.
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