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Expand chart
Data: Council of Economic Advisers; Note: CEA calculation is after tax and adjusts for demographics of workforce, work benefits and a different measure of inflation. "CPI adj." is only adjusted for the Consumer Price Index, used by Bureau of Labor Statistics; Chart: Andrew Witherspoon/Axios

White House economists believe wage growth has climbed at a faster rate than what's been previously calculated, according to new data released Wednesday.

Why it matters: Unemployment is nearing a 20-year low, but wage growth has been meek — 0.1% in the second quarter from a year earlier, according to the Bureau of Labor Statistics — leaving economists scratching their heads. But the White House's new calculations put that wage growth figure at 1.4%.

The White House argues that the traditional methodology doesn't adjust for lower-skilled or younger workers coming into the workforce (who typically have lower wages) and would-be retirees leaving the workforce (who usually are paid more.)

  • The White House said this measure should account for other ways workers are compensated, including bonuses, paid time off, and health benefits.
  • Officials also said a different measure of inflation should be used in wage growth calculation.
  • Top Trump economic advisor Kevin Hassett said in a media call that this effort is not a criticism of the data released by the Bureau of Labor Statistics, which said it could not comment.

The bottom line: Most economists are still likely to cite the BLS's traditional measures of wage growth but, some say, the White House asks an appropriate question about how income is measured.

  • "While you can say the motivation [for the measurement adjustment] was political, what comes out at the other end is a legitimate issues regarding mis-measurements," said Steve Blitz, an economist at TS Lombard, a research firm.
  • "They are not the first administration to do this and they are certainly not the last," Blitz added, citing the Obama and Nixon years.

Go deeper

Off the Rails

Episode 5: The secret CIA plan

Photo illustration: Aïda Amer, Sarah Grillo/Axios. Photo: Zach Gibson/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. This Axios series takes you inside the collapse of a president.

Episode 5: Trump vs. Gina — The president becomes increasingly rash and devises a plan to tamper with the nation's intelligence command.

In his final weeks in office, after losing the election to Joe Biden, President Donald Trump embarked on a vengeful exit strategy that included a hasty and ill-thought-out plan to jam up CIA Director Gina Haspel by firing her top deputy and replacing him with a protege of Republican Congressman Devin Nunes.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Health: CDC director defends agency's response to pandemic — CDC warns highly transmissible coronavirus variant could become dominant in U.S. in March.
  2. Politics: Empire State Building among hundreds to light up in Biden inauguration coronavirus tribute.
  3. Vaccine: Fauci: 100 million doses in 100 days is "absolutely" doable.
  4. Economy: Unemployment filings explode again.
  5. Tech: Kids' screen time sees a big increase.

Biden Cabinet confirmation schedule: When to watch hearings

Joe Biden and Kamala Harris on Jan. 16 in Wilmington, Delaware. Photo: Angela Weiss/AFP via Getty Images

The first hearings for President-elect Joe Biden's Cabinet nominations begin on Tuesday, with testimony from his picks to lead the departments of State, Homeland and Defense.

Why it matters: It's been a slow start for a process that usually takes place days or weeks earlier for incoming presidents. The first slate of nominees will appear on Tuesday before a Republican-controlled Senate, but that will change once the new Democratic senators-elect from Georgia are sworn in.

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